₦airaland Forum

Nigeria settles N501 billion power debts as Tinubu tackles decade-old crises



…14 power plants signs debts settlements


Nigeria raised N501 billion in its first bond sale dedicated to clearing power sector debts, achieving full subscription as President Bola Tinubu’s administration moves to address payment arrears that have choked electricity generation for over a decade.

The inaugural tranche under the Presidential Power Sector Debt Reduction Programme closed Tuesday with participation from pension funds, banks and asset managers, according to Olu Arowolo Verheijen, special adviser to the President on Energy. The issuance comprised N300 billion from capital markets and N201 billion in bonds allocated directly to power generation companies.


The program targets 14 power plants operated by five generation companies owed for electricity supplied between February 2015 and March 2025. Total negotiated settlements stand at 827.16 billion naira, payable in four instalments, with the first bond proceeds funding approximately 50 percent of obligations through a combination of cash and notes.

“Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made,” said Kola Adesina, group managing director of Sahara Power Group, which operates five plants, including the 1,320-megawatt Egbin facility. “Once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant.”


The settlement covers First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited, representing 4,483.60 megawatts per hour of generation capacity. The companies have executed agreements with Nigerian Bulk Electricity Trading Plc, the state-owned bulk purchaser that accumulated the debts.


Nigeria’s chronic power shortages have constrained economic growth in Africa’s most populous nation, where blackouts remain routine despite gas reserves that rank among the continent’s largest. Generation companies, starved of payments, have struggled to maintain equipment and fuel supplies, creating a vicious cycle of unreliable output and mounting debts.

The Tinubu administration, which took office in May 2023, has prioritised electricity reform alongside controversial subsidy removals. The debt program represents the most concrete effort yet to restore financial viability to a sector where payment discipline collapsed under previous governments.

CardinalStone Partners Limited served as lead financial adviser and issuing house for the transaction, working with NBET as sponsor. The Debt Management Office, Central Bank of Nigeria, National Pensions Commission and Nigerian Revenue Service supported the issuance.


Series 1 proceeds will fund the first and second installment payments to participating companies, estimated at N421.42 billion . The program ultimately aims to finalise settlement for 290,644.84 gigawatt hours of electricity billed over the past decade, impacting service to 12.03 million registered customers.

“The Federal Government reaffirms its commitment to disciplined implementation of the Programme,” Verheijen said at Tuesday’s signing ceremony in Lagos. “We look forward to the participation of other power generation companies, as part of our broader reforms aimed at building a financially sustainable electricity market.”


The bond structure provides a market-based mechanism for debt resolution while imposing fiscal discipline through validated claims and transparent financing. By clearing historic arrears, authorities expect improved liquidity for generation companies, enabling them to meet operating obligations and attract new investment.

Nigeria’s electricity market has undergone partial privatization since 2013, when the government sold generation and distribution assets while retaining transmission infrastructure. However, the sector has remained plagued by payment defaults, with distribution companies often failing to remit collections to the bulk trader, which in turn cannot pay generators.

The debt program forms part of broader structural reforms including tariff adjustments and efforts to improve collection efficiency. Success in restoring financial discipline could prove critical to unlocking the investment needed to expand generation capacity and reduce blackouts that cost Nigerian businesses billions annually.

Wale Edun, minister of finance and Adebayo Adelabu, minister of power supported the initiative, which required coordination across multiple government agencies to structure the bonds and secure regulatory approvals.

Additional generation companies may join subsequent tranches as the government works through the backlog of verified receivables, with three more installments planned to complete the N827.16 billion in negotiated settlements.

oluwaseyi0:
Slow and steady
We are getting there

easzypeaszy:
Wetin this man go use Obi eye see 2027 no be small
If Obi see 2Mil make them give am Presidency

easzypeaszy:
Wetin this man go use Obi eye see 2027 no be small
If Obi see 2Mil make them give am Presidency

southsouthking:
Una talk pass like this 2023, you guys still haven't recovered from the shock yet.
4 people tweeting in a room.

Nigeria’s electricity market has undergone partial privatization since 2013, when the government sold generation and distribution assets while retaining transmission infrastructure. However, the sector has remained plagued by payment defaults, with distribution companies often failing to remit collections to the bulk trader, which in turn cannot pay generators

FreeStuffsNG:
The bond structure provides a market-based mechanism for debt resolution while imposing fiscal discipline through validated claims and transparent financing. By clearing historic arrears, authorities expect improved liquidity for generation companies, enabling them to meet operating obligations and attract new investment.

The program targets 14 power plants operated by five generation companies owed for electricity supplied between February 2015 and March 2025. Total negotiated settlements stand at 827.16 billion naira, payable in four instalments, with the first bond proceeds funding approximately 50 percent of obligations through a combination of cash and notes.


This is how to show working

Thank you Mr. Wale Edun for the brilliant and resourceful strategy.

Asiwaju Tinubu is fixing all the legacy problems and doing so with unparalleled patriotism and brilliance.

All the enemies of Nigeria will lose las las. They always lose. God bless Nigeria for ever!

FreeStuffsNG:
The bond structure provides a market-based mechanism for debt resolution while imposing fiscal discipline through validated claims and transparent financing. By clearing historic arrears, authorities expect improved liquidity for generation companies, enabling them to meet operating obligations and attract new investment.

The program targets 14 power plants operated by five generation companies owed for electricity supplied between February 2015 and March 2025. Total negotiated settlements stand at 827.16 billion naira, payable in four instalments, with the first bond proceeds funding approximately 50 percent of obligations through a combination of cash and notes.


This is how to show working
Thank you Mr. Wale Edun for the brilliant and resourceful strategy.
Asiwaju Tinubu is fixing all the legacy problems and doing so with unparalleled patriotism and brilliance.
All the enemies of Nigeria will lose las las. They always lose. God bless Nigeria for ever!

KingGBsky:
Can Tinubu tackle anything? A clueless criminal Buffon working for France. How can a man who does not have any clue of what to do with governance except for stealing and allowing others to steal with total and complete confidence knowing fully well the yahoo boys pursuing EFCC is off their reach.

KingGBsky:
Can Tinubu tackle anything? A clueless criminal Buffon working for France. How can a man who does not have any clue of what to do with governance except for stealing and allowing others to steal with total and complete confidence knowing fully well the yahoo boys pursuing EFCC is off their reach.

KingGBsky:
Can Tinubu tackle anything? A clueless criminal Buffon working for France. How can a man who does not have any clue of what to do with governance except for stealing and allowing others to steal with total and complete confidence knowing fully well the yahoo boys pursuing EFCC is off their reach.