LAGOS, NIGERIA — The Federal Government has successfully closed its inaugural ₦501 billion bond issuance under the Presidential Power Sector Debt Reduction Programme (PPSDRP). The bond, which saw an overwhelming response from institutional investors, marks a historic attempt to fix the liquidity crisis that has crippled the Nigerian Electricity Supply Industry (NESI) for over ten years.
Investor Confidence Hits a High Note
Speaking at the signing ceremony in Lagos on January 27, 2026, the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, revealed that the bond recorded a significant 100% subscription (with some market reports highlighting interest levels suggesting even deeper demand).
- Key Investors: Subscription came largely from pension funds, banks, and asset managers.
- The Structure: The ₦501 billion comprises ₦300 billion raised directly from the capital markets and ₦201 billion in bonds allotted to participating generation companies (GenCos).
Clearing the Backlog: 2015–2025
The program focuses on settling verified receivables for electricity supplied between February 2015 and March 2025. To date, five major power generation companies, representing 14 power plants, have signed formal Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET):
- First Independent Power Limited (FIPL)
- Geregu Power Plc
- Ibom Power Company Limited
- Mabon Limited
- Niger Delta Power Holding Company Limited (NDPHC)
The total negotiated settlement for these five companies is valued at ₦827.16 billion, which will be paid in four phased installments.
Why This Matters for Consumers
For years, GenCos have struggled with a ₦4 trillion legacy debt, making it difficult to maintain equipment or pay for gas. By injecting ₦421.42 billion (roughly 50% of the negotiated amount) into the system through this first phase, the government expects:
- Restored Liquidity: GenCos can now settle their own operational debts and gas suppliers.
- Increased Generation: With better cash flow, plants like Geregu and NDPHC can operate at higher capacities.
- Investor Certainty: Clearing these “choking” debts makes the Nigerian power market attractive for new private investment.
“This represents a decisive reset of the electricity market,” Verheijen noted. “We are combining debt resolution with broader structural reforms to build a financially sustainable sector.”
