Tinubu-backed programme targets liquidity crunch, restores confidence in Nigeria’s power market
The Federal Government has taken a major step towards resolving Nigeria’s long-standing power sector debt crisis, estimated at about ₦4 trillion, with the issuance of a ₦501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP).
The bond, which recorded 100 per cent subscription from pension funds, banks, asset managers and other institutional investors, is aimed at clearing legacy payment arrears owed to power generation companies and restoring liquidity across the electricity value chain.
In a statement issued on Tuesday, the Special Adviser to the President on Energy, Olu Verheijen, described the successful bond issuance as a significant milestone in rebuilding confidence in the Nigerian Electricity Supply Industry (NESI) and resetting the electricity market.
The programme, championed by President Bola Tinubu, is designed to address more than a decade of unpaid obligations to generation companies, a situation that has constrained liquidity, weakened balance sheets and discouraged new investment in the power sector.
Speaking at the bond issuance signing ceremony in Lagos on Thursday, Verheijen said the initiative represents a decisive shift in power sector reform, combining debt resolution with broader financial and structural changes.
The signing followed the successful completion of Series 1 Power Sector Bond Issuance by NBET Finance Company Plc. According to Verheijen, the Series 1 issuance closed at ₦501 billion, comprising ₦300 billion raised from the capital market and ₦201 billion in bonds allotted to participating power generation companies, reflecting strong investor confidence in the reform agenda.
Under the programme, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with power generation companies. So far, five generation companies representing 14 power plants nationwide—First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited—have executed Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET).
The total negotiated settlement amount for these companies stands at ₦827.16 billion, to be paid in four phased instalments.
Verheijen said proceeds from the Series 1 bond issuance will fund the first and second instalment payments to participating generation companies with signed agreements. These payments, estimated at ₦421.42 billion, represent about 50 per cent of the total negotiated settlement amount and will be made through a combination of cash and notes.
Reacting to the development, Group Managing Director of Sahara Power Group, Kola Adesina, said the resolution of legacy debts was critical to unlocking new investment in the sector.
“Capital formation can only come when there is confidence and a clear line of sight to recovering investments previously made,” Adesina said. “Because we were owed so much, it was difficult to commit additional capital.
“But based on President Bola Ahmed Tinubu’s commitment to resolving these legacy issues, we took the bull by the horns last year. Once this process is completed, construction will commence immediately on the second phase of our Egbin Power Plant.”
Industry stakeholders said clearing historic arrears is expected to significantly improve liquidity for power generation companies, strengthen their ability to meet operating and debt obligations, unlock new investments and support more reliable electricity supply to homes and businesses.
They added that the programme reinforces fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.
When completed, the programme is expected to impact 4,483.60 megawatt-hours per hour of electricity generation capacity by Nigerian generation companies, effectively settling payments for 290,644.84 gigawatt-hours of electricity billed since February 2015.
The initiative will also provide a foundation for capacity expansion by companies serving 12.03 million active registered electricity customers nationwide.
Verheijen noted that CardinalStone Partners Limited is leading the consortium of professional advisers appointed for the transaction, working closely with NBET, which served as sponsor, and the Office of the Special Adviser on Energy, which led settlement negotiations with generation companies.
“The Federal Government reaffirms its commitment to disciplined implementation of the programme,” Verheijen said. “We look forward to the participation of additional generation companies as part of our broader reforms aimed at building a financially sustainable electricity market capable of supporting Nigeria’s long-term economic growth.”
