FG launches N590bn power sector bond to settle GenCo debts and boost liquidity, with subscriptions closing December 30, 2025

The Federal Government of Nigeria has opened subscription for the N590bn Series 1 Power Sector Bond, aimed at settling longstanding debts owed to electricity generation companies and restoring liquidity to the nation’s power sector.

Also read: NDPHC Restores 450MW to National Grid in Major Recovery

The bond, issued by NBET Finance Company Plc, a Special Purpose Vehicle sponsored by the Nigerian Bulk Electricity Trading Plc, opened for investors on December 19 and will close on December 30, 2025.

The offering forms the first tranche of a broader N4tn Presidential Power Sector Debt Reduction Programme approved by the Federal Executive Council.

According to CardinalStone Partners Limited, the bond’s proceeds will primarily be used to settle NBET’s verified unpaid liabilities to GenCos accrued between February 2015 and March 2025.

The issuance is split into two tranches: N300bn in cash (Tranche A) and N290bn in non-cash (Tranche B), each with a seven-year tenor, fixed semi-annual coupons, and an amortising repayment structure.

“The programme is designed to address legacy debt while boosting investor confidence in the electricity sector,” the mail to prospective investors stated.

The bond is fully guaranteed by the Federal Government and benefits from pension fund eligibility, CBN classification as liquid assets, and Ministry of Finance tax exemptions.

The expected settlement date is January 8, 2026, and the bonds will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited.

Despite government assurances, industry stakeholders have expressed concerns about the structure of the SPV, NBET Finance Company Plc.

Questions have arisen regarding its legal status, shareholders, and whether the NBET licence permits the transfer of GenCo liabilities to a separate entity.

Concerns were also raised about the complexity of the bond issuance and associated advisory fees, including whether these costs will come from the N4tn programme or the federal budget.

“The use of an SPV for this bond raises transparency and regulatory questions,” an anonymous source involved in the transaction stated.

“It remains unclear why the Federal Government cannot issue the bond directly and why liabilities are being transferred to an entity not widely recognised in the electricity supply industry.”

Also read: CBN Flags Worrying Surge in Nigeria Currency Outside Banks

The N590bn power sector bond represents a critical step in the government’s efforts to resolve long-standing debts and stabilise Nigeria’s power sector, though scrutiny over its execution continues.