Edun: FG Restoring Confidence in Power Sector, as N501bn Bond for Gencos is 100% Subscribed

• 5 generation firms sign N827bn deal, others pending

• Gencos pledge capacity expansion after settlement

• Payments to cover 290,644.84GW/hr billed since 2015

• Power grid collapses for second time in 2026, recovery completed

•LCCI: Incessant grid issues pose threat to businesses

Emmanuel Addeh in Abuja and Peter Uzoho, Dike Onwuamaeze in Lagos

The federal government yesterday announced the successful issuance of a N501 billion inaugural bond for Generation Companies (Gencos) under the Presidential Power Sector Debt Reduction Programme (PPSDRP), recording 100 per cent subscription from pension funds, banks, asset managers and other investors.

Finance Minister and Coordinating Minister of the Economy, Wale Edun, said the strong market response to the bond underscored renewed trust in government reforms and its commitment to stabilising the electricity value chain, improve liquidity, and attract long-term private capital into the sector.

As part of the deal, five Gencos which keyed into the programme aimed at settling the N4 trillion legacy debt owed by the government for over a decade, have signed Final Settlement Agreements (FIAs), with a total negotiated value of N827.16 billion, to be paid in four instalments.

Initiated by the Bola Tinubu administration, the programme is designed to address long-standing payment arrears owed to Gencos which for over a decade constrained liquidity, weakened balance sheets and discouraged investment across the power sector value chain.

Speaking at the bond issuance signing ceremony in Lagos, Edun said the federal government remains focused on restoring liquidity, investor confidence and discipline in the electricity market.

Edun, who was represented by the Director General of the Debt Management Office (DMO), Patience Oniha, said the signing of the bonds under the N4 trillion Power Sector Multi-Instrument Issuance Programme represented far more than a financing transaction.

According to him, it marked a critical turning point in Nigeria’s collective effort to address long-standing structural challenges in Nigeria’s power sector and to lay a stronger foundation for its long-term sustainability.

For many years, Edun admitted that legacy debts owed to Gencos have constrained liquidity across the electricity value chain, noting that these obligations weakened balance sheets, discouraged investment, and ultimately limited the sector’s ability to deliver reliable power to Nigerian homes and businesses.

He said: “The federal government recognised that resolving these legacy issues was not optional — it was essential. That recognition gave rise to the PPSDRP and, subsequently, to the N4 trillion Power Sector Multi-Instrument Issuance Programme, designed as a structured, credible, and fiscally responsible mechanism for settling these obligations.”

Edun said the transaction sends a clear and reassuring signal to the power sector and to the wider economy that the federal government was among others, committed to honouring its obligations, prepared to deploy innovative financial solutions to resolve systemic challenges, and remain focused on restoring liquidity, confidence, and discipline across the electricity market.

By settling legacy debts in a structured manner, he said the government was enabling Gencos to stabilise operations, improve maintenance, and attract new investment, all of which, he noted, were critical to improving power supply nationwide.

He emphasised that the programme was anchored on strong governance, transparency, and fiscal prudence. According to him, the Ministry of Finance, working closely with NBET and other stakeholders, remains committed to ensuring that this initiative supports sector reform while safeguarding macroeconomic stability.

He added: “Ultimately, a sustainable power sector is not just an energy objective — it is an economic imperative. Reliable electricity underpins industrial growth, job creation, and improved quality of life for millions of Nigerians.”

Special Adviser to the President on Energy, Olu Verheijen, in her remarks, stated that the programme represented a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.

The signing, she said, followed the successful completion of Series 1 Power Sector Bond Issuance by NBET Finance Company Plc, which closed at N501 billion, comprising N300 billion raised from the capital markets and N201 billion in bonds allotted to participating Gencos.

Verheijen recognised the ‘visionary’ leadership of the President  as well as the support from the Minister of Finance and Coordinating Minister of the Economy, Edun, and the Minister of Power,  Adebayo Adelabu, in making the programme a reality.

She further acknowledged the support of all members of the committee who played vital roles in making the capital raise a success, all key power sector stakeholders as well as government authorities, including the DMO Central Bank of Nigeria (CBN), the National Pensions Commission (NPC) and the Nigerian Revenue Service (NRS), who facilitated enhancements for the bond issue.

“The federal government reaffirms its commitment to disciplined implementation of the programme, and we look forward to the participation of other power generation companies, as part of our broader reforms aimed at building a financially sustainable electricity market that is capable of supporting Nigeria’s long-term economic growth,”  Verheijen added.

THISDAY learnt that under the programme, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with power generation companies.

To date, five Gencos, according to the government, representing 14 power plants nationwide, including First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and the Niger Delta Power Holding Company Limited (NDPHC), the government said, have executed settlement agreements with NBET.

However, some of the big power plants that have not yet signed the agreement include Egbin plant in Lagos, Transcorp plant in Delta, and Shiroro hydro plant in Niger State, among others.

The total negotiated settlement amount for these companies stands at N827.16 billion, to be paid in four phased installments. Proceeds from Series 1 issuance will fund the first and second installment payments to participating power generation companies with signed agreements, estimated at N421.42 billion, representing approximately 50 per cent of the total negotiated settlement amount. The payment for this initial phase will be made through a mix of cash and notes.

The seven-year year bonds which were issued by NBET Finance Company Plc, a Special Purpose Vehicle (SPV) established for the transaction, are fully guaranteed by the full faith and credit of the federal government.

Verheijen observed that for more than a decade, Nigeria’s electricity sector has been constrained not by lack of demand or installed capacity, but by unresolved legacy liabilities and chronic liquidity shortfalls.

Those pressures, she said,  weakened balance sheets across the value chain, constrained gas supply, reduced plant availability, and ultimately limited the pace at which electricity could be delivered reliably to homes and businesses.

She said restoring financial credibility had to come first, adding that that conviction led to the establishment of the presidential power sector debt reduction programme, chaired by the Minister of Finance/Coordinating Minister of the Economy, Edun.

The presidential aide noted that the programme was not conceived as a bailout but a balance-sheet reset and that its purpose was to clear verified legacy obligations, restore liquidity, and re-establish the conditions under which operators can plan, operate, and invest on commercial terms.

She added: “Over the past several months, we have worked closely with the Ministry of Finance, NBET, NERC, and power generation companies to reconcile claims and negotiate settlements based strictly on verified obligations.  Today’s signing marks the outcome of that process.

“The significance of this milestone lies not only in clearing the past, but in what it unlocks going forward. Resolving these liabilities restores liquidity across the value chain, strengthens payment certainty for gas suppliers, and creates the financial headroom required for operators to stabilise assets, improve availability, and plan new investment.

“Equally important is how this reset has been implemented. The Federal Executive Council approved a multi-tranche, bond-financed settlement structure, allowing liabilities to be resolved through domestic capital markets rather than through immediate fiscal outlays.”

She explained that as liquidity improves, Distribution Companies (Discos) will be held to clearer performance expectations around service delivery, network investment, and transparency.

“As reliability improves, demand follows. Businesses can plan with confidence. Industrial users can scale. Revenue increasingly follows service, and investment follows revenue”, she added.

Taken together, she said these measures represent a coordinated reset of Nigeria’s electricity

sector, pointing out that debt settlement addresses immediate liquidity constraints.

Furthermore, she said financial reforms restore pricing discipline, operational reforms underpin reliability and together, they establish a market that is more predictable, more investable, and better aligned with Nigeria’s long-term economic priorities.

“The bond issuance we mark today should therefore be understood not simply as a financing exercise, but as a core component of a broader restructuring effort—one that signals seriousness about contract enforceability, commercial viability, and sustained reform”, she said.

In his remarks, the acting Managing Director of NBET, Johnson Akinnawo, said the successful close of the N501 billion bond represented a major step forward in resolving the long-standing challenge in the power sector.

“The successful close of the N501 billion bond represents a major step forward in resolving the long-standing challenge that has constrained the power sector for years. This intervention will significantly improve liquidity across the value chain, enable operators to stabilise their operations and support renewed investment in the Nigerian power sector,” he said.

Akinnawo acknowledged professional advisers, members of the committee, particularly  Edun, whose leadership and support, he said, provided the bedrock for the success, and all who played vital roles in making the capital raise a success.

He added that NBET remained committed to working closely with the federal government, market participants and transaction advisers to ensure the transparent and efficient deployment of proceeds in line with the objectives of the presidential power sector debt reduction programme.

Also speaking, Kola Adesina, the Group Managing Director of Sahara Power Group, which owns five power plants argued that capital formation can only come when there is confidence in the power sector.

“Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made. Because we were being owed so much, it was a bit of a problem for us to put in more money.

“But last year we took the bull by the horns, based on President Bola Ahmed Tinubu’s commitment in resolving the legacy issues, and I can say that once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant,” he added.

By clearing historical arrears, the programme is expected to improve liquidity for Gencos, strengthen their ability to meet operating and debt obligations, unlock new investment across the sector and support more reliable electricity supply to homes and businesses. It also reinforces fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.

When completed, the programme will impact 4,483.60MWh/h of electricity generation capacity by Nigerian Gencos, effectively finalising settlement of payments for 290,644.84GWhr of electricity billed since February 2015 and providing a strong foundation for new investments into capacity enhancement and expansion by companies serving 12.03 million active registered customers across the country.

CardinalStone Partners Limited, a leading Investment banking firm in Nigeria, led the consortium of appointed professional parties as Lead Financial Adviser and Lead Issuing House to successfully execute the bond issue.

The organisation worked closely with NBET that acted as sponsor on the transaction, and the Office of the Special Adviser on Energy that led the settlement negotiations and engagements with the Gencos.

Some of the government representatives at the event included: Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Musliu Oseni and the Director General of the Bureau of Public Enterprises (BPE), Mr. Ayodeji Gbeleyi, among others.

But despite recent efforts to ensure stability, Nigeria’s national electricity grid collapsed again yesterday, plunging the country into a nationwide blackout and marking the second system failure recorded in 2026 within one week.  The last grid collapse was recorded last Friday.

The system collapse, which occurred at about 10:48am, triggered a complete loss of supply across the national grid, cutting electricity to homes, businesses and critical infrastructure nationwide. The incident added to growing concerns over the fragility of Nigeria’s power infrastructure amid recurring grid failures.

Distribution companies across the country confirmed the outage in separate statements to customers, attributing the blackout to a total grid collapse and assuring consumers that efforts were underway to restore supply.

Eko Electricity Distribution Company (EKEDC) said the collapse led to a total loss of power across its network. In a notice to customers, the utility stated: “There was a system collapse at 10:48hrs which has resulted in a loss of power supply across our network. We are currently working with our TCN partners as we hope for the speedy restoration of the grid. We will keep you updated as soon as power supply is restored”

Port Harcourt Electricity Distribution Company (PHED) also confirmed that its entire franchise area was affected by the outage. In its statement, PHED said: “ Kindly be informed that the outage currently experienced in all our franchise is due to grid collapse. We appeal to our esteemed customers to exercise patience as the relevant team is working tirelessly to restore power supply as soon as possible. All inconveniences are regretted.”

Similarly, Abuja Electricity Distribution Company (AEDC) told customers that supply had been lost across its network and that the timeline for restoration remained uncertain.

AEDC said: “We regret to inform you that there is currently a loss of power supply across our franchise area. We do not have a view of when we will be restored to the grid, however our technical teams are working closely with relevant stakeholders to ensure the prompt restoration. We will update you as soon as we have more information. We sincerely appreciate your patience and understanding as we work to serve you better.”

The collapse immediately halted electricity supply nationwide, forcing many businesses to switch to generators and leaving households without power for hours.

However, the Nigerian Independent System Operator (NISO) said it was a system disturbance, rather than a collapse, as reported.

“NISO wishes to state that at approximately 10:48 hours on January 27, 2026, the national grid experienced a voltage disturbance which originated from the Gombe Transmission Substation.

“The voltage disturbance rapidly propagated across the network, affecting Jebba, Kainji, and subsequently Ayede Transmission Substations. The event was accompanied by the tripping of some transmission lines and generating units, resulting in a partial system collapse.

“Appropriate corrective actions were immediately implemented to stabilize the system and restore normal operations. Restoration, which began at about 11:11am has since been completed.

The incident only affected part of the grid therefore not a total collapse as reported by some media organizations. The national grid has been fully restored and electricity supply across the affected areas has since returned to normal,” NISO stated.

Meanwhile, the Lagos Chamber of Commerce and Industry (LCCI) yesterday expressed grave concern over the second national grid collapse within five days, declaring that “this recurrence underscores deep structural and operational weaknesses in the power transmission system and poses a direct threat to manufacturers, MSMEs, and Nigeria’s overall business environment.”

The LCCI lamented that the collapse is recurring at a critical moment when the economy is expected to move from crisis management and stabilisation into a consolidation phase in 2026. It also declared that restoring grid stability must be treated as an economic emergency, not merely a technical issue.The Director General of LCCI, Dr. Chinyere Almona, expressed these views in a press statement titled: “LCCI Demands Forensic Audit of the National Grid”.

Almona said: “Based on recent patterns and in the absence of urgent structural fixes, the LCCI estimates that Nigeria could experience tens of grid collapses in 2026 under a ‘business-as-usual’ scenario.”

She however, stated that immediate reforms, system upgrades, and strict operational discipline could reduce this figure to zero incidents and move the country closer to grid reliability benchmarks required for economic consolidation.

The LCCI noted that repeated grid failures impose severe costs on businesses through lost production hours, damaged equipment, increased reliance on self-generation, higher operating expenses, and reduced competitiveness.

It added: “These disruptions weaken investor confidence, worsen inflationary pressures, and undermine the credibility of economic reforms.”

The called on the federal government to take a decisive and transparent position by instituting an independent forensic audit of the national grid covering transmission infrastructure integrity, system protection schemes, operational protocols, and governance of grid management.

“The findings should form a critical part of a grid performance system reform in the short term,” the organisation stated.

The chamber said that without urgent intervention, recurring grid collapses will continue to undermine the government’s objective of entering a consolidation phase in 2026, while constraining productivity, exports, and job creation.

It pointed out that reliable power supply is foundational to industrialisation, competitiveness, and macroeconomic stability. “What we are witnessing today is therefore unacceptable and calls for decisive, coordinated action to safeguard national economic performance,” LCCI said.