ABUJA, Nigeria, Sept. 24, 2026 (XOL Africa) — Africa Finance Corporation has acted as co-financial adviser on Nigeria’s ₦728.9 billion ($516 million) Series 2 power-sector bond, part of a government programme aimed at clearing longstanding debts owed to electricity generators and improving liquidity across the industry.
The transaction, issued through NBET Finance Company, brings the value of bonds raised under the first phase of Nigeria’s ₦4 trillion Power Sector Multi-Instrument Issuance Programme to about ₦1.23 trillion. The first ₦501 billion series was completed in January.
The programme is intended to settle verified overdue receivables owed to generation companies for electricity supplied between February 2015 and March 2025. AFC said the latest issuance was oversubscribed, attracting pension funds, banks, sovereign wealth funds and asset managers.
“Closing the second issuance within eight months of the inaugural series shows the Programme is working as designed,” said Banji Fehintola, AFC’s executive board member and head of financial services.
“Verified legacy obligations are being converted into transparent, investable instruments, and domestic investors are backing that approach,” he said, adding that AFC would continue supporting reforms intended to restore liquidity and encourage investment in Nigeria’s generation capacity.
The Series 2 transaction comprises ₦402 billion in cash bonds raised from the domestic capital market and ₦326.9 billion in non-cash bonds allocated to participating generation companies, according to details of the transaction. Eleven GenCos participated, compared with eight in the first series.
AFC worked alongside CardinalStone Partners as co-financial advisers, providing support on settlement agreements with additional GenCos, the structuring of cash and non-cash components and engagement with investors ahead of the issuance.
The transaction follows the government’s full and timely payment of the first coupon and principal instalment on the Series 1 bonds in July, a development officials have cited as evidence of the programme’s repayment framework.
For Nigeria’s electricity generators, the debt programme is intended to release cash tied up in unpaid receivables and improve their ability to pay gas suppliers, maintain plants and invest in additional generation capacity.
“For too long, verified receivables have sat on GenCos’ balance sheets, limiting their ability to pay gas suppliers, maintain plants and invest in new capacity,” said Akin Odeyemi, managing director and chief executive of Nigerian Bulk Electricity Trading.
“With Series 2, we are turning more of those arrears into liquidity across the electricity value chain,” he said.
The programme is designed to address obligations linked to about 5,398 megawatts of generation capacity and payments for 290,644.84 gigawatt-hours of electricity billed since February 2015, according to AFC. It is also intended to support further investment in generation capacity serving about 12 million active registered electricity customers.
The bond, however, forms only part of the government’s broader power-sector reform effort. Finance Minister Taiwo Oyedele has said debt settlement must be accompanied by stronger market discipline, better revenue collection, lower technical and commercial losses and greater accountability to prevent a new accumulation of arrears.
The government is also pursuing investments in metering and transmission infrastructure and a transition towards bilateral electricity trading based on more market-reflective pricing.
AFC, established in 2007, said it has invested more than $19 billion across 36 African countries since its inception and currently has 48 member countries.
SUPPORT AFRICAN BUSINESS JOURNALISM
Help XOL Africa expand independent business reporting across Africa.
SUPPORT XOL AFRICA →
