Key points
- The Presidency said ongoing power sector reforms are restoring investor confidence by resolving legacy financial obligations.
- The Federal Government disbursed N501 billion under the first phase of the Presidential Power Sector Financial Reforms Programme.
- About N333.12 billion was paid to eight generation companies covering 17 power plants.
- The government said the second bond issuance would deepen liquidity and support long-term private investment in the electricity sector.
Main story
The Presidency says ongoing reforms in Nigeria’s power sector are restoring investor confidence by converting legacy liabilities into bankable investment opportunities and strengthening the financial sustainability of the electricity industry.
The Special Adviser to the President on Energy, Mrs Olu Verheijen, stated this on Tuesday in Abuja at the Investor Forum for the Presidential Power Sector Financial Reforms Programme Series II Bond Issuance.
Verheijen said the Tinubu administration was addressing longstanding fiscal distortions that had weakened the power sector and discouraged investment.
“Every successful capital market tells the same story: investors return where governments keep their promises.
“Today’s forum is about exactly that. President Bola Tinubu’s administration has demonstrated beyond doubt its commitment to making a clean break from fiscal dysfunction,” she said.
According to her, the reforms have transformed an unsustainable financial burden into a credible investment opportunity.
“We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity.
“That liquidity, if sustained, will strengthen the entire electricity value chain, improve operational performance and restore confidence across the sector,” she said.
Verheijen said the administration deliberately prioritised implementation before expanding the programme.
“Markets do not reward promises. They reward performance. That is why we deliberately chose execution before expansion.
“Series I delivered on its promise, proving that government can honour its obligations and restore market confidence,” she said.
She disclosed that the Federal Government deployed about N501 billion under Series I to settle verified obligations, comprising N300 billion in cash and N201 billion in bond instruments.
According to her, N333.12 billion was paid to eight generation companies operating 17 power plants, while the first coupon payment of about N63.5 billion was redeemed on July 14.
“We met our obligation on schedule. The first Series I coupon was paid in full. In sovereign finance, trust compounds just as powerfully as interest.
“Governments that expect private capital to invest must first demonstrate that their own commitments will be honoured,” she said.
Verheijen said improved liquidity had enabled participating generation companies to meet obligations to gas suppliers, lenders and operations contractors.
She added that the strong investor response to the first issuance reflected growing confidence in both the programme and the government’s broader economic reforms.
According to her, Series II will deepen liquidity across the electricity value chain, settle additional verified legacy obligations and strengthen the financial foundation needed to attract long-term private investment.
“Series I proved the model. Series II scales it.
“This issuance extends the settlement of verified legacy obligations, deepens liquidity throughout the electricity value chain and strengthens the foundations for private investment,” she said.
She urged investors to see the bond as more than a financial instrument, saying it represented an opportunity to support reforms aimed at restoring payment discipline and improving the sector’s financial health.
Verheijen said the reforms would strengthen sector cash flows, attract more private capital, improve electricity supply and support Nigeria’s economic transformation.
The issues
Nigeria’s electricity sector has long struggled with liquidity shortfalls, unpaid obligations and weak investor confidence. The government is seeking to restore financial discipline and attract private capital through bond-backed settlement of verified legacy debts.
What’s being said
“We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity.” — Olu Verheijen, Special Adviser to the President on Energy
What’s next
The Federal Government will proceed with the Series II bond issuance to settle additional verified obligations and deepen liquidity across the electricity value chain as part of its wider power sector reform programme.
Bottom line
The Presidency says restoring financial discipline and honouring payment commitments are central to rebuilding investor confidence and attracting the long-term capital needed to improve Nigeria’s electricity sector.
