Federal Government Issues Series 2 Bonds to Clear Power Sector Debt, Boost Liquidity
Nigeria’s federal debt to power generation companies reached N6 trillion by end‑2025, prompting a bond issuance
In Brief
- •Nigeria’s federal debt to power generation companies reached N6 trillion by end‑2025, prompting a bond issuance
- •The government sold a N728.979 billion Series 2 bond in September 2026 to settle legacy debts under its N4 trillion Power Sector Debt Reduction Programme
- •The 2025 gross tariff subsidy obligation was N1.928 trillion, averaging N160.69 billion per month, a slight decline from 2024
- •Generation and transmission capacity rose to above 5,000 MW in recent weeks, with a peak of 5,330 MW in August‑September
- •Stakeholders highlight that the bond is a step toward liquidity but note that structural reforms remain incomplete
Why It Matters
The bond issuance marks a significant move to restore liquidity in Nigeria’s power sector, potentially easing the financial burden on electricity generation companies and enabling the government to meet its subsidy commitments. By reducing the debt load, the government may free up budgetary space for other development priorities, while the improved generation capacity signals progress toward reliable power supply for consumers.
Key Details
- Total Power Sector Debt (2025)
- N6 trillion
- Series 2 Bond Amount
- N728.979 billion
- Gross Tariff Subsidy Obligation (2025)
- N1.928 trillion
- Average Monthly Subsidy
- N160.69 billion
- Debt Reduction Programme Target
- N4 trillion
- Peak Generation Capacity (Aug‑Sep 2026)
- 5,330 MW
Context & Background
The bond sale is part of President Bola Ahmed Tinubu’s Power Sector Debt Reduction Programme, aligned with the Renewed Hope Agenda to improve Nigeria’s electricity supply and fiscal health.
Original Reporting & Sources
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