Nigeria Launches ₦501bn Power Sector Bond Programme with AFC as Co-Financial Adviser
Africa Finance Corporation (AFC), Africa’s leading infrastructure solutions provider, has announced its role as Co-Financial Adviser in the successful issuance of the first tranche of bonds under the Federal Government of Nigeria’s Presidential Power Sector Financial Reforms Programme (PPSFRP).
The issuance of ₦501 billion represents a major milestone in the implementation of the ₦4 trillion Power Sector Bond Programme, which aims to resolve over a decade of accumulated legacy debt in Nigeria’s electricity supply industry.
The Programme was overseen by the Presidential Power Sector Debt Reduction Committee (PPSDRC), with technical leadership from the Office of the Special Adviser to the President on Energy, and executed through NBET Finance Company Plc, a special purpose vehicle of Nigerian Bulk Electricity Trading Plc (NBET). Proceeds from the bond 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, extinguishing legacy claims and restoring much-needed liquidity to the sector.
This landmark initiative by the Federal Government of Nigeria is designed to stabilise the power sector’s finances, strengthen GenCos’ balance sheets, and rebuild investor confidence. By clearing long-standing arrears, the Programme is expected to unlock new domestic and international investments across the entire electricity value chain.
The transaction received strong backing from the domestic pension fund investment community, with approximately 50% of the total financing sourced from Pension Fund Administrators, demonstrating the successful mobilisation of local capital for critical power infrastructure.
AFC delivered comprehensive financial advisory services to the Federal Government of Nigeria, including the development of the Programme’s negotiation framework, support in negotiating and executing settlement agreements with GenCos, and structuring the bond issuance. Working alongside CardinalStone Partners as Co-Financial Advisers, AFC leveraged its deep local market expertise to help deliver a complex and high-impact reform initiative.
Commenting on the transaction, Olu Verheijen, Special Adviser to the President on Energy, said the Programme represents a decisive reset of Nigeria’s electricity market, combining debt resolution with broader financial and structural reforms. She noted that AFC’s sector expertise and understanding of market dynamics were instrumental in achieving a credible and sustainable outcome.
Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, added that the successful issuance underscores AFC’s commitment to transformative reforms in Nigeria’s power sector, laying a strong foundation for improved electricity supply and long-term growth.
Upon completion, the Programme is expected to impact approximately 5,398MW of generation capacity, settle payments for 290,644.84 GWh of electricity billed since February 2015, and support future investments by power companies serving over 12 million active registered customers nationwide.
The PPSFRP forms a central pillar of Nigeria’s broader energy sector reforms, alongside investments in consumer metering, transmission infrastructure, and the transition to market-reflective, bilateral electricity trading. Collectively, these reforms aim to build a financially viable and sustainable electricity market capable of supporting Nigeria’s long-term industrial and economic development.
