The Federal Government has issued the ₦728.98bn power sector bond to settle verified legacy debts owed to 11 electricity generation companies (GenCos). The move is part of efforts to address financial problems affecting Nigeria’s electricity market.
The Series 2 bond was issued under the government’s ₦4 trillion Power Sector Multi-Instrument Issuance Programme. It comprises ₦402 billion in cash bonds raised through the domestic capital market and ₦326.98 billion in non-cash bonds allocated to participating GenCos.
According to the government, the latest intervention is designed to improve liquidity across the electricity value chain and restore confidence among power producers and investors.
How the ₦728.98bn Power Sector Bond Will Help
The ₦728.98bn power sector bond expands the government’s debt-settlement programme to 11 GenCos covering 21 power plants. It follows the first series, which raised ₦501 billion in January 2026 and involved eight GenCos.
Together, the two issuances have provided more than ₦1.23 trillion under Phase 1 of the wider ₦4 trillion programme.
The government says officials extensively verified the debts before reaching settlement agreements with the participating companies.
The intervention is significant because unpaid debts have affected the ability of power producers to invest in additional generation capacity. Clearing verified obligations could therefore provide some financial relief to companies operating within the electricity supply chain.
Why the Bond Alone May Not Fix Nigeria’s Power Problems
Despite the size of the intervention, government officials have acknowledged that settling old debts alone will not solve Nigeria’s electricity crisis.
The Nigerian Bulk Electricity Trading Plc has estimated that the sector faces an annual funding gap of about ₦1.7 trillion. Revenue shortfalls and tariffs that do not fully cover the cost of supplying electricity partly cause the gap.
Finance Minister Taiwo Oyedele said the programme must be accompanied by reforms. These include improving revenue assurance, reducing technical and commercial losses, and strengthening accountability across the electricity market.
The government therefore faces a bigger challenge: preventing new debts from accumulating after it clears the existing ones. Without improvements in revenue collection, payment discipline and operational efficiency, the financial problems affecting the sector could return.
For Nigerian households and businesses, what matters most is whether the programme improves electricity supply and strengthens the power sector. What matters is whether it contributes to more reliable electricity supply and a financially sustainable power sector.