By Jemimah Wellington, JKNewsMedia Correspondent
STRONG INVESTOR demand has backed a N501 billion inaugural bond issued by the Federal Government of Nigeria (FGN) under the Presidential Power Sector Debt Reduction Programme (PPSDRP), with participation from pension funds, banks, asset managers and other investors.
JKNewsMedia.com reports that the Federal Government (FG) confirmed that the bond issuance marks the launch of the PPSDRP, which targets the resolution of legacy payment arrears owed to power generation companies within the Nigerian Electricity Supply Industry (NESI).
The PPSDRP, championed by President Bola Tinubu, is designed to address long standing payment arrears to power generation companies that, for more than a decade, constrained liquidity, weakened balance sheets and discouraged investment across the power sector value chain.
Speaking at the bond issuance signing ceremony held in Lagos on 27 January 2026, the Special Adviser to the President on Energy, Olu Arowolo Verheijen, stated that the PPSDRP represents a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.
The signing followed the successful completion of Series 1 Power Sector Bond Issuance by NBET Finance Company Plc.
The Series 1 issuance closed at N501 billion, comprising N300 billion raised from the capital markets and N201 billion in bonds allotted to participating power generation companies.
Under the PPSDRP, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with power generation companies.
Five power generation companies representing fourteen power plants nationwide have executed Settlement Agreements with Nigerian Bulk Electricity Trading (NBET) Plc.
The companies are First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited.
The total negotiated settlement amount for these companies stands at N827.16 billion, to be paid in four phased instalments.
Proceeds from the Series 1 issuance will fund the first and second instalment payments to participating power generation companies with signed Settlement Agreements.
These payments are estimated at N421.42 billion, representing approximately 50% of the total negotiated settlement amount.
Also, the FG stated that payments for this initial phase will be made through a mix of cash and notes.
Mr. Kola Adesina, Group Managing Director, Sahara Power Group, which owns five power plants, speaking at the ceremony on behalf of generation companies, said, “Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made.
“Because we were being owed so much, it was a bit of a problem for us to put in more money. But last year we took the bull by the horns, based on President Bola Tinubu’s commitment in resolving the legacy issues, and I can say that once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant. On behalf of the Generation Companies, I’d like to thank the President for this resolution.”
Furthermore, the FG stated that by clearing historic arrears, the PPSDRP is expected to improve liquidity for power generation companies, strengthen their ability to meet operating and debt obligations, unlock new investment across the sector and support more reliable electricity supply to homes and businesses.
It also stated that the PPSDRP is set to reinforce fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.
When completed, it will impact 4,483.60MWh per hour of electricity generation capacity by Nigerian generation companies.
It will finalise settlement of payments for 290,644.84GWhr of electricity billed since February 2015 and provide a foundation for new investments into capacity enhancement and expansion by companies serving 12.03mn active registered customers nationwide.
The Special Adviser to the President on Energy recognised the leadership of President Bola Tinubu and acknowledged the support of the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, and the Minister of Power, Chief Adebayo Adelabu.
She also acknowledged the contributions of members of the PPSDRP Committee, key power sector stakeholders and government authorities, including the Debt Management Office (DMO), Central Bank of Nigeria (CBN), National Pensions Commission and Nigerian Revenue Service (NPCNRS).
Also, CardinalStone Partners Limited served as Lead Financial Adviser and Lead Issuing House for the Series 1 Bond Issue, working with Nigerian Bulk Electricity Trading Plc as sponsor and the Office of the Special Adviser on Energy, which led settlement negotiations with power generation companies, the presidential release states.
Verheijen further said, “The FG reaffirms its commitment to disciplined implementation of the PPSDRP, and we look forward to the participation of other power generation companies, as part of our broader reforms aimed at building a financially sustainable electricity market that is capable of supporting Nigeria’s long term economic growth.”
