The Federal Government of Nigeria has taken a major step toward resolving long-standing liquidity challenges in the power sector with the hosting of an Investor Forum for the first phase of its landmark ?4 trillion Power Sector Bond Programme.

The forum was organised by the Presidential Power Sector Debt Reduction Committee (PPSDRC) under the leadership of the Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun.

The session was hosted in collaboration with the Nigerian Bulk Electricity Trading PLC (NBET) and CardinalStone Partners Limited, the lead financial adviser and issuing house for the programme.

The meeting was convened to present the structure of the first series of the bond, ?1.23 trillion backed by a sovereign guarantee and to engage investors ahead of its imminent issuance.

It brought together pension fund administrators, asset managers, banks, insurance companies, trustees, power sector operators, development partners, and representatives of key regulatory agencies.

Earlier this year, the PPSDRC announced the Federal Government’s plan to launch the ?4 trillion initiative, described as the first of its kind in the sector.

The programme is designed to clear legacy debts, stabilise the electricity market and restore investor confidence in the Nigerian Electricity Supply Industry (NESI).

In her opening remarks, the Special Adviser to the President on Energy, Mrs Olu Verheijen, said the bond programme marks the beginning of broader reforms aimed at achieving a more reliable and financially stable power sector.

“But clearing old debts only matters if we prevent new ones from piling up behind them. This is why the debt programme is tied to a set of broader financial reforms designed to stabilise the market and ensure that liquidity, once restored, is maintained.”

Participants at the forum received a detailed explanation of the bond’s structure, credit enhancements, cashflow arrangements and risk-mitigation features. Presenters also outlined the programme’s governance framework and how it fits into the government’s wider plan to unlock new investments and strengthen efficiency across the power value chain.

Edun, in his presentation, described the bond as a transparent and disciplined financing instrument that aligns with the government’s broader economic priorities.

He noted that the bond qualifies for Central Bank of Nigeria (CBN) liquidity status and has secured PenCom exemption, allowing Pension Fund Administrators (PFAs) to participate.

“This is a way of strengthening market transparency, encouraging competition and encouraging the private sector, which is 90 per cent of the economy,” he said.

“The Government commitment is to transparency, fiscal responsibility and disciplined financial management—coming to the market rather than printing money or exploring other ways of raising necessary funds.”

During an interactive session, investors raised questions about repayment plans, risk management and the long-term sustainability of reforms in the sector once the debts have been cleared.

Responding to concerns about sustainability, the Minister of Power, Mr. Adebayo Adelabu said the government was accelerating efforts to revamp distribution infrastructure and improve the financial health of electricity companies.

He explained that more customers are being migrated to Band A, where tariffs are cost-reflective, thereby reducing dependence on subsidies.

He added that ongoing measures to cut collection losses and improve efficiency are expected to boost liquidity across the market over time.

Acting Managing Director of NBET, Mr Johnson Akinnawo, said the programme represents a “strategic reset” rather than a bailout for the sector. He described the sovereign guarantee backing the bond as a catalyst for growth.

“The sovereign guarantee of the Federal Government is an unwavering sunlight and water that ensures that this planting will grow into a forest of opportunities powering industries, homes and dreams,” he said.

More than 650 participants attended the forum, with many expressing strong interest in the offer and support for the government’s ongoing reforms. The meeting also acknowledged recent efforts by the Minister of Power to improve electricity supply nationwide.

The bond issuance for Phase 1 is expected to mark a significant turning point for the sector as the government moves to restore investor confidence and chart a more sustainable energy future for the country. (The Guardian)

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