The Federal Government’s N501.02 billion bond issuance marks a significant step in efforts to address longstanding liquidity challenges in Nigeria’s power sector.
Mr Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Mr Adebayo Adelabu, disclosed this in a statement on Monday in Abuja.
Tunji said the bond is central to restoring confidence in the electricity market and repositioning the sector for long-term sustainability.
He described the issuance—executed through the Nigerian Bulk Electricity Trading (NBET)—as part of the N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Tinubu.
According to him, the initiative signals a shift from ad hoc interventions to structured, market-driven solutions aimed at addressing the sector’s over N6 trillion debt burden and entrenched inefficiencies.
He noted that chronic revenue shortfalls, driven by non-cost-reflective tariffs and underfunded subsidies, have weakened the ability of generation companies to meet obligations to gas suppliers and maintain infrastructure.
“The bond proceeds will help settle legacy debts, restore gas supply and improve plant maintenance—key factors for boosting electricity generation,” Tunji said.
He added that the intervention is expected to enhance investor confidence, supported by a sovereign guarantee and aligned with global financing standards, thereby attracting private capital and improving sector bankability.
Tunji further explained that the initiative, alongside targeted subsidies and ongoing tariff adjustments, reflects a broader policy push toward full commercialisation and long-term viability of the sector.
He said the programme is not only about debt resolution but also about resetting the electricity market by restoring liquidity, strengthening financial discipline and creating a predictable investment climate.
Industry stakeholders, he added, have described the intervention as a “reset” capable of rebuilding trust and supporting sustainable growth across the electricity value chain.
Tunji, however, acknowledged that challenges such as transmission constraints and revenue adequacy persist.
He maintained that ongoing reforms, including improved transmission capacity and settlement agreements with generation companies, underscore the government’s commitment to holistic power sector reform.
