Nigeria closes $550M power-sector bond to clear legacy GenCo debt

What's the deal? Nigerian Bulk Electricity TradingDealroom has a profile for this one. Try Dealroom → raised N728.979 billion (roughly $550 million) in a debt issuance to settle legacy debts owed to electricity generation companies and inject liquidity into Nigeria's power market. CardinalStone PartnersDealroom has a profile for this one. Try Dealroom → advised on the transaction, announced in September 2026.

The detail: The Series 2 Power Sector Bond comprises N402 billion in cash bonds raised from the capital market and N326.979 billion in non-cash bonds approved for GenCos in the Presidential Power Sector Debt Reduction Programme. It caps Phase 1 of the federal government's N4 trillion Power Sector Multi-Instrument Issuance Programme, bringing the total raised since the January 2026 Series 1 issuance to N1.23 trillion — matching the Phase 1 target.

Why now? The programme responds to a liquidity crisis that has constrained Nigeria's entire electricity value chain. CardinalStone chief executive Michael Nzewi called the Series 2 transaction the largest bond issuance in the history of the Nigerian capital market.

What's the endgame? The bond is designed to move the sector "from shortage, to settlement, to surplus," according to a representative for presidential adviser Olu Verheijen. Officials say households, offices, and industries are the intended beneficiaries as the programme runs alongside reforms including the Presidential Metering Initiative.

What could go wrong? Rilwan Lanre Babalola, the President on Power, warned that clearing legacy debt alone will not fix Nigeria's power problems. He pointed to poor payment discipline, weak revenue collection, and technical and commercial losses that keep driving new debt.

What they said: "As we address the stock of legacy debt, we must also tackle the causes of new debt accumulation," Babalola said. Finance minister Taiwo Oyedele said the focus must now shift to "discipline in implementation."

The signal: At roughly $550 million, the raise sits in the 92nd percentile of all-time debt rounds in Nigerian energy — a marker of how much capital is being mobilised to unblock a stalled market. Whether settlement translates into reliable supply now depends on the reforms that follow.

Read more: leadership.ng

Image credit: Hythe Eye