The Federal Government has issued a N501.02 billion bond to address liquidity challenges in the power sector. This move is seen as a major milestone in Nigeria's power sector reform agenda. Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Adebayo Adelabu, described the bond issuance as central to restoring confidence in the electricity market.
The bond, executed through the Nigerian Bulk Electricity Trading (NBET), is part of a broader N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Tinubu. This programme aims to clear a significant portion of the over N6 trillion debt burden crippling the sector. The bond is designed to settle legacy debts, restore gas supply, and enable improved plant maintenance, which are key factors in boosting electricity generation.
According to Tunji, the bond proceeds are expected to reverse the trend of chronic revenue shortfalls arising from non-cost-reflective tariffs and underfunded subsidies. This has constrained generation companies' ability to meet obligations to gas suppliers and maintain infrastructure. The intervention is expected to attract private capital, enhance bankability, and stimulate further investments in generation and infrastructure.
Tunji also noted that the bond is central to unlocking growth across the electricity value chain. He said that restoring liquidity, enhancing bankability, and creating a predictable investment climate would lay the groundwork for sustainable growth and improved electricity supply.
