The federal government yesterday announced the successful issuance of a N501 billion inaugural bond for Generation Companies (Gencos) under the Presidential Power Sector Debt Reduction Programme (PPSDRP), recording 100 per cent subscription from pension funds, banks, asset managers and other investors.Finance Minister and Coordinating Minister of the Economy, Wale Edun, said the strong market response to the bond underscored renewed trust in government reforms and its commitment to stabilising the electricity value chain, improve liquidity, and attract long-term private capital into the sector.As part of the deal, five Gencos which keyed into the programme aimed at settling the N4 trillion legacy debt owed by the government for over a decade, have signed Final Settlement Agreements (FIAs), with a total negotiated value of N827.16 billion, to be paid in four instalments.Initiated by the Bola Tinubu administration, the programme is designed to address long-standing payment arrears owed to Gencos which for over a decade constrained liquidity, weakened balance sheets and discouraged investment across the power sector value chain.Speaking at the bond issuance signing ceremony in Lagos, Edun said the federal government remains focused on restoring liquidity, investor confidence and discipline in the electricity market.Edun, who was represented by the Director General of the Debt Management Office (DMO), Patience Oniha, said the signing of the bonds under the N4 trillion Power Sector Multi-Instrument Issuance Programme represented far more than a financing transaction.According to him, it marked a critical turning point in Nigeria’s collective effort to address long-standing structural challenges in Nigeria’s power sector and to lay a stronger foundation for its long-term sustainability.For many years, Edun admitted that legacy debts owed to Gencos have constrained liquidity across the electricity value chain, noting that these obligations weakened balance sheets, discouraged investment, and ultimately limited the sector’s ability to deliver reliable power to Nigerian homes and businesses.He said: “The federal government recognised that resolving these legacy issues was not optional — it was essential. That recognition gave rise to the PPSDRP and, subsequently, to the N4 trillion Power Sector Multi-Instrument Issuance Programme, designed as a structured, credible, and fiscally responsible mechanism for settling these obligations.”Edun said the transaction sends a clear and reassuring signal to the power sector and to the wider economy that the federal government was among others, committed to honouring its obligations, prepared to deploy innovative financial solutions to resolve systemic challenges, and remain focused on restoring liquidity, confidence, and discipline across the electricity market.By settling legacy debts in a structured manner, he said the government was enabling Gencos to stabilise operations, improve maintenance, and attract new investment, all of which, he noted, were critical to improving power supply nationwide.He emphasised that the programme was anchored on strong governance, transparency, and fiscal prudence. According to him, the Ministry of Finance, working closely with NBET and other stakeholders, remains committed to ensuring that this initiative supports sector reform while safeguarding macroeconomic stability.
He added: “Ultimately, a sustainable power sector is not just an energy objective — it is an economic imperative. Reliable electricity underpins industrial growth, job creation, and improved quality of life for millions of Nigerians.”
Special Adviser to the President on Energy, Olu Verheijen, in her remarks, stated that the programme represented a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.