By Peter Omopo
The Federal Government has launched a N590bn maiden bond issuance to begin offsetting the more than N4tn owed to power generation companies (GenCos), marking a significant step toward resolving a long-running liquidity crisis in Nigeria’s electricity market.
The issuance represents the first tranche of the N4tn NBET Finance Company Plc Bond Programme and is fully guaranteed by the Federal Government. It consists of N300bn in cash bonds to be offered to investors and N290bn in non-cash bonds to be directly allotted to GenCos on identical terms.
According to documents seen by PUNCH Online, the Series 1 bond will be issued between November and December 2025. CardinalStone Partners Limited is serving as lead issuing house and financial adviser.
The Series 1 offer carries a seven-year tenor with a fixed-rate coupon, semi-annual interest payments and an amortising repayment structure. It will be listed on both the Nigerian Exchange and the FMDQ Securities Exchange, and will qualify as a trustee investment, making it eligible for investment by pension funds, banks, insurers, asset managers and high-net-worth investors.
Pricing will be benchmarked against the seven-year Federal Government bond yield plus a spread, with the transaction conducted via book building. The minimum subscription is N5m, with additional purchases allowed in multiples of N1,000.
The term sheet further shows that the issuer may absorb up to N1.23tn in oversubscription as part of Phase 1, opening the door for additional non-cash bond allocations to GenCos if required.
The Tinubu administration has described the programme as a critical intervention aimed at stabilising the power sector, where GenCos have struggled under a mounting debt burden now estimated at N4tn and projected to reach N6tn by the end of the year. The liquidity shortfall—driven largely by chronic under-remittance from electricity distribution companies—has undermined gas supply contracts, forced power plants to operate below capacity and contributed to repeated national grid failures.
The bond is backed by the full faith and credit of the Federal Government, enjoys Central Bank liquidity status and meets PenCom requirements. Repayment will be sourced primarily from the national budget, with recoveries from DisCos serving as a secondary funding stream.
Officials say the issuance marks the beginning of a broader financial restructuring aimed at restoring investor confidence, improving power generation and stabilising the country’s fragile electricity supply system.
