By Ayomide Otitoju
Africa Finance Corporation (AFC) has announced its role as Co-Financial Adviser on the successful issuance of the inaugural tranche of bonds under the Federal Government of Nigeria’s Presidential Power Sector Financial Reforms Programme (PPSFRP).
The bond issuance, valued at ₦501 billion, represents a major milestone in the implementation of the ₦4 trillion Power Sector Bond Programme, which is aimed at resolving more than a decade of legacy debt obligations in Nigeria’s electricity supply industry.
The programme is overseen by the Presidential Power Sector Debt Reduction Committee, with technical leadership provided by the Office of the Special Adviser to the President on Energy, and implemented through Nigerian Bulk Electricity Trading Plc’s special purpose vehicle, NBET Finance Company Plc. Proceeds from the issuance will be used to settle verified and overdue receivables owed to power generation companies (GenCos) for electricity supplied between February 2015 and March 2025, thereby clearing legacy claims and improving liquidity across the sector.
The initiative is expected to restore financial stability in the power sector, strengthen the balance sheets of GenCos and enhance investor confidence by addressing long-standing arrears. By resolving these obligations, the programme is also anticipated to attract new domestic and international capital across the electricity value chain.
The transaction received strong backing from the pension fund investment community, with about 50 per cent of the total financing secured from Pension Fund Administrators, reflecting successful mobilisation of domestic capital for critical power infrastructure.
AFC provided comprehensive financial advisory services to the Federal Government, including the design of the programme’s negotiation strategy, support in negotiating and executing settlement agreements with GenCos, and structuring of the bond issuance. The corporation worked alongside CardinalStone Partners as co-financial advisers.
Commenting on the transaction, AFC said the programme represents a decisive reset of Nigeria’s electricity market by combining debt resolution with broader financial and structural reforms, helping to restore liquidity, rebuild investor confidence and support long-term sustainability.
Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, said the successful issuance of the first tranche underscores the corporation’s commitment to supporting transformative reforms in Nigeria’s power sector.
“By resolving long-standing liquidity challenges and restoring confidence among investors and operators, this transaction lays the foundation for sustainable growth and improved electricity supply across the country,” Fehintola said.
When fully completed, the programme is expected to impact about 5,398 megawatts of electricity generation capacity, settle payments for over 290,644 gigawatt-hours of electricity billed since February 2015, and support new investments by power companies serving about 12 million active registered customers nationwide.
The programme forms a key part of the Federal Government’s broader energy sector reforms, alongside ongoing investments in consumer metering and transmission infrastructure, as well as a transition to bilateral electricity trading based on market-reflective pricing, aimed at creating a viable and sustainable electricity market to support Nigeria’s long-term industrial growth.
