Africa Finance Corporation (AFC) has backed the successful close of a ₦728.9 billion Series 2 power sector bond transaction by NBET Finance Company Plc, the special purpose vehicle of Nigerian Bulk Electricity Trading Plc (NBET), advancing Nigeria’s Presidential Power Sector Financial Reforms Programme (PPSFRP).
AFC said the bond deal is part of the government’s effort to address more than a decade of legacy debt in Nigeria’s electricity supply industry and restore liquidity across the power value chain. According to a press statement issued on Wednesday, AFC served as Co-Financial Adviser on the transaction, working in partnership with CardinalStone Partners.
The Series 2 issuance follows the ₦501 billion inaugural Series 1 transaction completed in January 2026, in which AFC also served as Co-Financial Adviser. The latest close brings cumulative issuance under the programme to approximately ₦1.23 trillion and marks a significant milestone in the implementation of the ₦4 trillion Power Sector Multi-Instrument Issuance Programme.
Proceeds from the Series 2 issuance will be used to continue settling verified, overdue receivables owed to power generation companies (GenCos) for electricity supplied between February 2015 and March 2025. In practical terms, the bond converts these outstanding obligations into a structured financial instrument, allowing the government to settle legacy claims while injecting liquidity into the electricity industry.
The Presidential Power Sector Debt Reduction Committee oversees the programme, with the Office of the Special Adviser to the President on Power providing technical leadership. Implementation is through NBET’s special purpose vehicle, NBET Finance Company Plc.
Building on its role in Series 1, AFC provided financial advisory services to the Federal Government on the Series 2 transaction, including support in negotiating and executing Settlement Agreements with additional GenCos, structuring the Series 2 cash and non-cash tranches, and engaging investors ahead of the offer.
Banji Fehintola, Executive Board Member and Head, Financial Services at AFC, described the milestone as evidence that the programme is working as designed.
“Closing the second issuance within eight months of the inaugural series shows the Programme is working as designed — verified legacy obligations are being converted into transparent, investable instruments, and domestic investors are backing that approach,” he said.
Fehintola said the programme would help restore liquidity to the power sector and lay the foundation for new investment in Nigeria’s generation capacity.
The Series 2 transaction follows the full and timely payment of the first coupon and principal instalment on the Series 1 Bonds in July 2026. The Series 2 issuance was oversubscribed and attracted strong demand from pension fund administrators, banks, sovereign wealth funds and asset managers, further mobilising domestic long-term capital for critical electricity infrastructure in Nigeria.
The importance of the debt settlement extends beyond the bond market. GenCos have said that unpaid receivables can constrain their ability to pay gas suppliers, maintain power plants and invest in new generation capacity. By addressing those arrears, the programme is intended to improve liquidity across the electricity value chain.
When completed, the programme is expected to impact approximately 5,398MW of electricity generation capacity operated by Nigerian GenCos, effectively finalising settlement of payments for 290,644.84GWhr of electricity billed since February 2015. It will also provide a foundation for new investments in capacity enhancement and expansion by companies serving 12 million active registered customers across the country.
Akin Odeyemi, Managing Director/Chief Executive Officer of NBET Plc, said verified receivables had remained on GenCos’ balance sheets for too long, limiting their ability to pay gas suppliers, maintain plants and invest in new capacity.
“With Series 2, we are turning more of those arrears into liquidity across the electricity value chain,” he said.
For consumers, the significance of the programme is therefore not simply the size of the bond, but what the settlement of the legacy debt could unlock for the wider electricity market: greater liquidity for power generators and a stronger financial foundation for investment in generation capacity.
Nigeria’s Presidential Power Sector Financial Reforms Programme forms part of the government’s broader energy-sector reforms, alongside ongoing investments in consumer metering and transmission infrastructure, and a transition to bilateral electricity trading between wholesale counterparties based on market-reflective pricing.
Together, these reforms are aimed at ensuring the evolution of a viable and sustainable electricity market in Nigeria to support long-term industrial growth and development.
