N501bn power sector bond: FG appoints Africa Finance

The Federal Government has appointed Africa Finance Corporation (AFC) as Co-Financial Adviser for the successful issuance of the inaugural N501 billion bond under the Presidential Power Sector Financial Reforms Programme (PPSFRP), marking a major step toward resolving long-standing debt challenges in Nigeria’s electricity industry. The bond issuance represents the first tranche of a broader N4 […]

The Federal Government has appointed Africa Finance Corporation (AFC) as Co-Financial Adviser for the successful issuance of the inaugural N501 billion bond under the Presidential Power Sector Financial Reforms Programme (PPSFRP), marking a major step toward resolving long-standing debt challenges in Nigeria’s electricity industry.

The bond issuance represents the first tranche of a broader N4 trillion Power Sector Bond Programme designed to clear over a decade of legacy payment arrears owed to electricity generation companies (GenCos) and restore financial stability across the sector.

The N501 billion issuance will be used to settle verified and overdue receivables owed to GenCos for electricity supplied between February 2015 and March 2025.

These arrears, which accumulated due to chronic liquidity constraints, tariff shortfalls and market inefficiencies, have weighed heavily on the sector, limiting investment, constraining maintenance spending and reducing generation capacity.

By extinguishing these legacy claims, the government aims to inject fresh liquidity into the system and strengthen the balance sheets of power producers, enabling them to increase output and invest in expansion.

Africa Finance Corporation, the continent’s leading infrastructure solutions provider, delivered comprehensive financial advisory services to the Federal Government on the landmark transaction.

According to the corporation, its mandate covered the design of the programme’s negotiation strategy framework, support for settlement talks with GenCos, and the structuring of the bond issuance.

AFC also assisted in crafting the financial architecture that underpins the bond programme to ensure transparency, credibility and investor appeal.

The transaction was overseen by the Presidential Power Sector Debt Reduction Committee (PPSDRC), while the Office of the Special Adviser to the President on Energy provided technical leadership.

Implementation was carried out through a special purpose vehicle — NBET Finance Company Plc — established by the Nigerian Bulk Electricity Trading Plc (NBET).

Special Adviser to the President on Energy, Olu Verheijen, described the programme as a turning point for Nigeria’s power sector.

According to her, the initiative goes beyond debt repayment and forms part of a broader set of financial and structural reforms aimed at repositioning the industry.

“This programme represents a decisive reset of Nigeria’s electricity market, combining debt resolution with broader financial and structural reforms,” Verheijen said.

AFC’s Executive Board Member and Head of Financial Services, Banji Fehintola, said the successful issuance demonstrates growing confidence in Nigeria’s reform agenda and AFC’s commitment to supporting transformative infrastructure projects across the continent.

He noted that resolving legacy liquidity issues is fundamental to attracting long-term capital.

“The successful issuance of the inaugural tranche under the Power Sector Bond Programme underscores AFC’s commitment to supporting transformative reforms in Nigeria’s power sector,” Fehintola said.