The Federal Government has officially signed a bond agreement worth N728.979 billion as part of its ongoing N4 trillion Power Sector Debt Reduction Programme. This initiative aims to settle verified legacy debts owed to electricity generation companies, thereby enhancing liquidity within Nigeria's power sector.

The bond issuance consists of N402 billion in cash bonds sourced from the domestic capital market, alongside N326.979 billion in non-cash bonds allocated to participating generation companies. This transaction marks a crucial step in the government's strategy to alleviate the financial burdens that have historically plagued the Nigerian Electricity Supply Industry.

During the signing ceremony held in Abuja, Mr. Akinola Odeyemi, Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), highlighted the significance of this bond issuance. He noted that this latest transaction not only aims to clear historical obligations but also to restore financial confidence and stimulate investment in electricity generation.

Odeyemi pointed out that the Series-2 bond issuance, which was launched in August 2026, saw participation from 11 generation companies, an increase from the eight companies that took part in the first series. This growth in participation is seen as a positive indicator of increasing confidence among stakeholders regarding the government's commitment to resolving outstanding obligations in the power sector.

In his remarks, the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, emphasized that the Series-2 bond transaction is a vital step towards addressing the accumulated legacy debts that have hindered liquidity and investment in Nigeria's electricity market. He stressed that the success of the bond programme is contingent upon improvements in market policy, revenue assurance, and efficiency across the electricity ecosystem.

Oyedele also pointed out that while the transaction showcases the government's capability to leverage Nigeria's domestic capital market for economic challenges, it should not be evaluated solely on the volume of bonds issued.

Furthermore, Olu Verheijen, Senior Special Adviser to the President on Energy, represented at the event, noted that the Series-2 bond agreement signifies a major expansion of the Presidential Power Sector Financial Reform Programme. This initiative is expected to lay a stronger foundation for a more sustainable and reliable power sector in Nigeria.

The signing of this bond agreement is seen as a pivotal move in the Federal Government's broader efforts to revitalize the electricity supply industry and foster an environment conducive to increased investment and improved service delivery.