Minister Adebayo Adelabu Unveils N501 Billion Bond To Resolve Nigeria’s Chronic Power Sector Liquidity Debt

Minister Adelabu debuts a N501.02 billion bond to settle electricity sector debts, improve gas supply, and restore investor confidence in Nigeria's energy market.

By: AXL Media

Published: Mar 31, 2026, 4:26 AM EDT

Source: The information in this article was sourced from THISDAY

A Strategic Intervention In The Energy Value Chain

The Federal Government has taken a decisive step toward resolving the systemic insolvency of the Nigerian Electricity Supply Industry by floating a N501.02 billion bond. This financial instrument, executed via the Nigerian Bulk Electricity Trading Plc, serves as the opening move in the N4 trillion Presidential Power Sector Debt Reduction Programme. According to Minister of Power Adebayo Adelabu, the bond represents a move away from temporary fixes toward a structured, market-driven framework. By addressing the N6 trillion cumulative debt currently paralyzing the sector, the government intends to provide a clean slate for generation companies and gas suppliers who have struggled with non-payment for years.

Restoring Operational Viability To Generation Companies

A primary objective of the new bond issuance is to provide immediate liquidity to power generation companies that have been unable to maintain critical infrastructure due to revenue shortfalls. These shortfalls have historically been exacerbated by tariffs that do not reflect the actual cost of production and underfunded government subsidies. According to Bolaji Tunji, the Minister’s Special Adviser, the proceeds will be utilized to settle legacy debts and ensure a consistent flow of payments to gas producers. By stabilizing these payments, the government expects to see a direct increase in total electricity generation as plants return to full operational capacity through improved maintenance and fuel security.

Enhancing Investor Confidence Through Sovereign Guarantees

Beyond providing immediate cash flow, the N501 billion bond is designed to signal a renewed commitment to global financing standards within the Nigerian energy market. Backed by a sovereign guarantee, the issuance aims to improve the bankability of power projects and attract significant private capital into the transmission and distribution networks. Minister Adelabu stated that the intervention is essential for creating a predictable investment climate that encourages long-term infrastructure development. This strategy aligns with broader reforms, including the implementation of targeted subsidies for vulnerable populations and a gradual shift toward full commercialization of the electricity market.