Nigeria FG Issues N590bn Bond to Settle Power Sector Debt, Aims to End "Legacy Overhang"

The Digest:

The Federal Government has taken a significant step toward resolving the chronic liquidity crisis in Nigeria's power sector with the issuance of a N590 billion bond.

Key Points:

• The Federal Government has issued a N590 billion bond as the first phase of a N4 trillion power sector debt settlement programme.
• The bond is guaranteed by the federal government and managed by NBET Finance Company Plc, a special purpose vehicle.
• The programme aims to settle verified arrears owed to power generation companies and gas suppliers.
• Authorities plan to raise N1.23 trillion by Q1 2026, with the full N4 trillion programme to continue into next year.
• The Special Adviser on Energy, Olu Verheijen, framed the move as a "strategic reset," not a bailout, to restore liquidity.
• The debt clearance is intended to allow GenCos to stabilize operations, invest with confidence, and improve power delivery.
• An investor forum in December presented the bond to over 600 institutional investors, including banks and pension funds.

This financial maneuver represents more than debt repayment; it is an attempt to untangle a legacy of arrears that has long suffocated investment and crippled reliability, offering a precarious hope that settling past debts might finally power a more stable future.


Sources: Nairametrics, Business Day