The Federal Government of Nigeria has through its Special Purpose Vehicle, the NBET Finance Company Plc, opened a ₦728.979 billion Series 2 Power Sector Bond issue under its ₦4 trillion Multi-Instrument Issuance Programme.
The bond is being issued in Tranches A and B with the government seeking to raise ₦400 billion through offer for subscription via Book Building and ₦328.797 billion private placement respectively.
Just like the first issueance, proceeds of the bonds will be used for settlement of outstanding liabilities of Power Generation Companies.(GenCos) liabilities.
While the book build price of both tranches ranges from 17.85% to 17.95%, tranche A is cash bonds with such targets as institutional, high-net-worth individuals and retail investors, while B is non-cash and targeted at GenCos.
The bond issuance opened on Monday, August 3, and closes August 14, 2026, while allotment and settlement is slated August 24, 2026.
According to a notice by Cordros Capital to its clients, the tranches are for a tenor of 7 years, fixed rates and semi-annual coupon rates; with amortizing repayment.
Recall that that the ₦590bn Series 1 Power Sector Bond issued by NBET Finance Company sponsored by the Nigerian Bulk Electricity Trading Plc (NBET), an agency of the Federal Government of Nigeria closed recently.
Issuance was an offer for subscription via book build and private placement at a price range of between 16.75 and 17 percent, while net proceeds of that bond for settlement of lingering legacy debt due to the electricity generation companies (GenCos) for the period between February 2015 and March 2025.
The ₦4 trillion programme aims to settle verified unpaid invoices owed to the Generation Companies from February 2015 to March 2025; and execute Settlement Agreements with agreed discounts on Legacy Debt owed to participating GenCos.
President Bola Tinubu established the Presidential Power Sector Debt Reduction Committee (PPSDRC) led by the then Minister of Finance & Coordinating Minister of the Economy, Wale Edun.
It is saddled it with the responsibility of developing a comprehensive and fiscally responsible strategy aimed at settling the debt owed to GenCos by NBET, and to improve the efficiency and overall attractiveness of the power sector in Nigeria. In line with the recommendation of the Committee, the Federal Executive Council (FEC), approved the establishment of the Debt Reduction Programme to settle the legacy debt.
The Debt Reduction Programme seeks to implement a structured, transparent and market-aligned debt resolution mechanism that will restore investor confidence, improve sector liquidity and support sustainable electricity generation capacity.
The Bond is Guaranteed by the full faith and credit of the Federal Government of Nigeria, enhanced with PenCom confirmation as eligible instrument for Pension Funds, CBN Liquidity Status and confirmation of Tax Exemption.
