The Federal Government has appointed African Finance Corporation (AFC) as joint financial advisor for the successful issuance of the first N501 billion bond under the Presidential Power Sector Financial Reform Program (PPSFRP), marking a major step towards resolving the long-standing debt problem in Nigeria’s power industry.
The bond issuance is the first part of a broader N4 trillion power sector bond program aimed at clearing over a decade of legacy payment arrears to generation companies (GenCos) and restoring financial stability to the sector as a whole.
The issuance of N501 billion will be used to settle confirmed and overdue receivables owed to GenCos for electricity supplied between February 2015 and March 2025.
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These arrears, accumulated due to chronic liquidity constraints, tariff shortfalls, and market inefficiencies, are weighing heavily on the sector by restricting investment, curbing maintenance spending, and reducing power generation capacity.
By extinguishing these legacy debts, the government aims to inject new liquidity into the system and strengthen generators’ balance sheets, allowing them to invest in increased power generation and expansion.
Africa Finance Corporation, the continent’s leading infrastructure solutions provider, provided comprehensive financial advisory services to the Federal Government on this landmark transaction.
The company said its duties included designing the program’s negotiation strategy framework, supporting settlement negotiations with GenCos, and structuring the bond issuance.
AFC also helped build the financial architecture that underpins the bond program to ensure transparency, credibility, and investor attractiveness.
The transaction was overseen by the President’s Power Sector Debt Reduction Commission (PPSDRC), with technical leadership provided by the Office of the President’s Special Advisor on Energy.
The implementation was carried out through NBET Finance Company Plc, a special purpose vehicle established by Nigerian Bulk Electric Trading Plc (NBET).
Special Assistant to the President on Energy, Mr. Olu Verheijen, said the program was a turning point for Nigeria’s power sector.
She said the initiative goes beyond debt repayment and is part of broader financial and structural reforms aimed at repositioning the industry.
“This program represents a decisive reset of Nigeria’s electricity market, combining debt resolution with broad financial and structural reforms,” Verheijen said.
AFC Board Member and Head of Financial Services, Banji Fehintra, said the successful launch demonstrates growing confidence in AFC’s efforts to support Nigeria’s reform agenda and transformative infrastructure projects across the continent.
He pointed out that resolving traditional liquidity issues is the basis for attracting long-term funds.
“The successful issuance of the first tranche under the Power Sector Bond Program underscores AFC’s commitment to supporting transformative reforms in Nigeria’s power sector,” Fehintra said.
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