The Federal Government of Nigeria has successfully issued its inaugural ₦501 billion bond as part of the Presidential Power Sector Debt Reduction Programme (PPSDRP), achieving full 100% subscription from a diverse group of investors including pension funds, banks, asset managers, and others.
The issuance which is the first step in a broader multi-instrument programme valued at up to ₦4 trillion, is targeted at the resolution of accumulated payment arrears owed to power generation companies (GenCos) between February 2015 and March 2025 . These debts, spanning over a decade, have historically strained liquidity, weakened financial positions, and deterred investments throughout the electricity value chain.
The bond issuance, executed through NBET Finance Company Plc—a special purpose vehicle linked to the Nigerian Bulk Electricity Trading Plc (NBET)—closed at ₦501 billion. This amount included ₦300 billion raised directly from the capital markets and ₦201 billion allotted in bonds to participating GenCos.
To date, five GenCos—representing 14 power plants—have signed settlement agreements with NBET: First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited (NDPHC). The combined negotiated settlement for these entities totals ₦827.16 billion, to be disbursed in four phased instalments.
Proceeds from this Series 1 issuance will primarily finance the first two instalments, amounting to approximately ₦421.42 billion (about 50% of the total negotiated amount for the initial signatories), delivered through a combination of cash and bonds.
CardinalStone served as lead issuing house and financial adviser, backed by a syndicate including Comercio Partners Limited , Cordros, Coronation Merchant Bank, Emerging Africa Group, FSDH Group, Iron Global Markets Limited, Meristem Nigeria, Renaissance Capital Africa, and United Capital Plc.
Legal support came from ENR Advisory (for the issuer) and Olaniwun Ajayi (for the issue). Other key parties included Futureview Securities Limited as securities broker, Coronation Registrars Limited as registrars, Access Bank Plc and Wema Bank Plc as receiving banks, Afrinvest Trustees Limited as bond trustee, and Sankore Securities Limited as NBET SPV share trustee.
Repayment of the bonds will be backed mainly by federal government budgetary allocations to a sinking fund managed by the Central Bank of Nigeria, along with structured contributions from electricity distribution companies (DisCos) and other designated sources.
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