By Seun Ibiyemi
The Federal Government’s N501.02 billion bond issuance has been hailed as a significant milestone in Nigeria’s ongoing power sector reform, aimed at addressing longstanding liquidity challenges and restoring investor confidence.
Mr. Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Adebayo Adelabu, disclosed this in a statement issued on Monday in Abuja.
Tunji described the bond issuance as a critical step toward repositioning Nigeria’s electricity market for long-term sustainability, noting that it forms part of a broader N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Ahmed Tinubu.
According to him, the bond, executed through Nigerian Bulk Electricity Trading Plc, represents a strategic shift from ad hoc interventions to structured, market-driven solutions designed to tackle the over N6 trillion debt burden in the sector.
He explained that the initiative is aimed at improving cash flow across the electricity value chain, noting that persistent revenue shortfalls caused by non-cost-reflective tariffs and underfunded subsidies have hindered generation companies from meeting obligations to gas suppliers and maintaining infrastructure.
“The bond proceeds are expected to settle legacy debts, restore gas supply, and enable improved plant maintenance, which are critical to boosting electricity generation,” Tunji said.
He added that beyond addressing immediate liquidity concerns, the bond signals renewed investor confidence, supported by a sovereign guarantee and aligned with global financing standards.
Tunji noted that the intervention is expected to attract private capital, enhance bankability, and stimulate further investments in power generation and infrastructure, while complementing ongoing reforms such as targeted subsidies for vulnerable consumers and tariff adjustments.
He emphasised that the initiative is not only about debt settlement but also about resetting the foundation of the electricity market.
“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 said.
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Tunji further stated that the programme reflects a deliberate policy shift toward full commercialisation and long-term viability of the sector, with stakeholders already describing it as a “reset” capable of restoring trust and strengthening financial discipline.
He, however, acknowledged that challenges such as transmission constraints and revenue adequacy still persist, stressing that the reform represents a coordinated effort to move the sector toward a more efficient and investor-friendly model.
“As reforms continue to unfold, the bond stands out as a cornerstone achievement that not only addresses immediate financial pressures but also cements Adelabu’s legacy as a reform-driven minister steering Nigeria’s power sector toward stability, growth, and the long-envisioned goal of reliable electricity supply,” Tunji said.
