By Obinna Uballa
The Federal Government has kick-started efforts to settle the estimated N4tn owed to electricity Generation Companies (GenCos) with the launch of a N590bn first-tranche bond under a new NBET Finance Company Plc Bond Programme.
According to documents seen on Tuesday, the Series 1 issuance – part of a wider N4trn programme guaranteed by the Federal Government – comprises N300bn in cash bonds to be sold to investors and N290bn in non-cash bonds to be allotted directly to GenCos on the same terms.
The Series 1 bonds are scheduled for issuance between November and December 2025, with CardinalStone Partners Limited serving as lead issuing house and financial adviser.
The term sheet shows that the bond carries a seven-year tenor, a fixed coupon rate, semi-annual interest payments and amortised redemption. It will be listed on both the Nigerian Exchange and the FMDQ Securities Exchange and will qualify under the Trustee Investment Act, making it eligible for pension funds, banks, insurers, asset managers and high-net-worth investors.
Pricing will be determined through a book-build process, benchmarked against the seven-year Federal Government bond yield plus a spread. Minimum subscription is set at N5m, representing 5,000 units at N1,000 each.
The issuer also retains the discretion to absorb up to N1.23tn in oversubscription, creating room for additional non-cash bond allocations to GenCos as part of Phase 1 of the programme.
Observers say the government’s move represents the most significant attempt yet to tackle the crippling liquidity crisis undermining Nigeria’s power sector. NBET’s long-standing inability to settle GenCos’ invoices, largely due to chronic under-remittance by electricity distribution companies (DisCos), has fuelled a debt pile estimated at N4trn and projected to hit N6trn by December.
The financial strain has weakened gas supply contracts, forced generating plants to operate below capacity, and contributed to repeated national grid collapses.
The Series 1 bond is fully backed by the Federal Government and recognised by the Central Bank of Nigeria for liquidity purposes. Repayment will be funded primarily through federal budget allocations, with NBET’s recoveries from DisCos providing a secondary repayment buffer.
Proceeds from the bond will go directly toward clearing outstanding GenCos’ obligations, marking what analysts describe as a long-awaited reset for Nigeria’s troubled electricity market.
