By Jeremy Fregene
The Federal Government has unveiled a N501.02 billion bond as a central plank of efforts to rescue Nigeria’s struggling power sector, with authorities describing the intervention as a decisive step towards resolving longstanding liquidity challenges and restoring stability.
The initiative, driven by the Minister of Power, Adebayo Adelabu, is aimed at clearing legacy debts, improving cash flow across the electricity value chain, and rebuilding investor confidence in a sector long plagued by structural inefficiencies.
In a statement issued in Abuja, the minister’s Special Adviser on Strategic Communications and Media Relations, Bolaji Tunji, said the bond marks a “major milestone” in the ongoing reform agenda.
According to him, the bond issuance, executed through the Nigerian Bulk Electricity Trading Company, forms part of a broader N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Ahmed Tinubu.
Tunji explained that the intervention represents a strategic shift from ad hoc government bailouts to more structured, market-driven solutions designed to tackle the over N6 trillion debt burden weighing down the sector.
“This is about more than just settling debts,” he said. “It is about resetting the foundation of the electricity market and positioning it for long-term sustainability.”
He noted that chronic revenue shortfalls, largely due to non-cost-reflective tariffs and underfunded subsidies, have severely constrained the ability of generation companies to meet obligations to gas suppliers and maintain critical infrastructure.
The bond, he said, is expected to reverse this trend by injecting much-needed liquidity, enabling the settlement of outstanding obligations, restoring gas supply, and improving plant maintenance— key factors required to boost electricity generation nationwide.
Beyond addressing immediate financial pressures, the government believes the move will enhance the sector’s bankability and attract fresh private investment. Backed by a sovereign guarantee and aligned with global financing standards, the bond is also expected to improve confidence among investors and lenders.
Tunji added that the initiative is complemented by broader reforms, including targeted subsidies for vulnerable consumers and ongoing tariff adjustments, all aimed at achieving full commercialisation of the electricity market.
Industry stakeholders, he said, have already described the programme as a “reset” capable of restoring trust, strengthening financial discipline, and unlocking growth across the value chain.
“By restoring liquidity, enhancing bankability, and creating a more predictable investment climate, the government is laying the groundwork for sustainable growth and improved electricity supply,” he stated.
He further disclosed that early settlement agreements with generation companies, alongside efforts to improve transmission capacity, would reinforce the administration’s commitment to holistic sector reform.
However, Tunji acknowledged that significant challenges remain, particularly in the areas of transmission infrastructure and revenue adequacy, which continue to pose constraints to optimal performance.
Despite these hurdles, the government insists the bond represents a turning point in Nigeria’s power sector journey, one that signals a deliberate move away from systemic inefficiencies towards a more viable, investor-friendly model.