FG to issue N1.23tr power bond to address GENCO debt, boost market confidence

By : 'Sola Akinsanmi

Date: 16 December 2025 11:25pm WAT

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Minister of Finance and Coordinating Minister of the Economy, Wale Edun

Minister of Finance and Coordinating Minister of the Economy, Wale Edun

The Federal Government has concluded arrangements to issue a N1.23 trillion Power Sector Bond aimed at addressing the debt burden of power generation companies (GENCOs) and stabilising the electricity market, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has stated.

Speaking at an Investor Forum organised by the Presidential Power Sector Debt Reduction Committee (PPSDRC) in collaboration with transaction advisers, Edun noted that the bond forms part of a wider N4 trillion debt programme designed to restore liquidity in the Nigerian Electricity Supply Industry (NESI) and rebuild investor confidence.

“As of June 2025, the government owed power generation companies about N6 trillion in unpaid electricity subsidies. In discussions with GENCOs, officials agreed that approximately 50 per cent of the debt may be forfeited to ease the liability,” Edun explained.

The forum, hosted by NBET and CardinalStone Partners Limited, drew over 650 participants, including pension fund administrators, banks, asset managers, insurance companies, and high-net-worth individuals, many of whom expressed interest in subscribing to the bond.

Edun emphasised that the bond has been structured to meet international standards, attract long-term institutional investors, and qualify for Central Bank of Nigeria (CBN) liquidity status. It also enjoys exemption from the National Pension Commission (PenCom), rendering it eligible for investment by Pension Fund Administrators.

“This initiative strengthens market transparency, encourages competition, and promotes private sector participation, which accounts for about 90 per cent of the economy,” Edun said. He added that the government prefers market-based financing mechanisms over currency printing or other unsustainable methods.

The Special Adviser to the President on Energy, Mrs. Olu Verheijen, observed that debt clearance must be coupled with financial and structural reforms to prevent recurrence. Meanwhile, the Acting Managing Director of NBET, Mr. Johnson Akinnawo, described the programme as a “strategic reset” for the power sector rather than a bailout, highlighting that the sovereign guarantee of the Federal Government ensures the initiative will “grow into opportunities powering industries, homes, and dreams.”

The bond’s Phase 1 issuance is expected to provide liquidity relief to GENCOs, address legacy debts, and create a foundation for a more efficient and self-sustaining electricity market.

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