FG’s N501bn Bond To Tackle Liquidity Crisis In Power Sector, Says Adelabu

The Minister of Power, Adebayo Adelabu, has said that the recently floated N501.02 billion bond issuance was a major step towards ending the prolonged liquidity in the power sector and repositioning the electricity market for long-term sustainability.

Special Adviser on Strategic Communications and Media Relations to the minister, Bolaji Tunji, in a statement in Abuja on Monday, recalled that the bond executed through the Nigerian Bulk Electricity Trading Plc (NBET) was part of a broader N4 trillion Presidential Power Sector Debt Reduction Programme approved by President  Bola Tinubu.

Adelabu stated that the move represents a strategic shift from ad hoc interventions to structured, market-driven solutions. Designed to clear a significant portion of the over N6 trillion cumulative debt burden crippling the sector, the initiative, he said, underscores a reform-focused approach aimed at addressing long-standing structural inefficiencies.

“At the heart of the reform is the drive to stabilise the Nigerian Electricity Supply Industry (NESI) by improving cash flow across the value chain. Chronic revenue shortfalls, largely due to non-cost-reflective tariffs and underfunded subsidies, had left generation companies unable to meet obligations to gas suppliers and maintain critical infrastructure.

“The bond proceeds are expected to reverse this trend by settling legacy debts, restoring gas supply, and enabling improved plant maintenance—key factors in boosting electricity generation.

“Beyond immediate liquidity support, the intervention signals renewed investor confidence in the sector. Backed by a sovereign guarantee and aligned with global financing standards, the bond is positioned to attract private capital, enhance bankability, and stimulate further investments in generation and infrastructure.

“Complementary reforms, including targeted subsidies for vulnerable consumers and ongoing tariff adjustments, reflect a broader policy framework aimed at achieving full commercialisation,” Adelabu stated.

Providing insight into the reform, Adelabu explained that the bond issuance is central to restoring confidence and unlocking growth across the electricity value chain.

He added:, “This intervention is not just about settling debts; it is about resetting the foundation of the power sector. By restoring liquidity, enhancing bankability, and creating a more predictable investment climate, the government is laying the groundwork for sustainable growth and improved electricity supply.”

He stressed that the initiative, alongside targeted subsidies and tariff reforms, reflects a deliberate policy shift towards full commercialisation and long-term viability of the sector.

According to the minister, while challenges such as transmission constraints and revenue adequacy persist, the bond initiative marks a critical turning point and highlights a coordinated effort to move the sector away from systemic inefficiencies towards a more viable, investor-friendly model.