NERC backs power minister’s call for harmony in electricity market

The Federal Government will tomorrow, July 21, host an Investors’ Forum ahead of the issuance of a second tranche bond worth about N729 billion to settle verified legacy debts owed to electricity generation companies (GenCos), marking another milestone in its drive to restore liquidity to Nigeria’s power sector.

The proposed issuance follows the N501 billion Series 1 bond floated in January this year and will complete the N1.23 trillion Series 1 and Series 2 components of the Presidential Power Sector Debt Reduction Programme (PPSDRP), the first phase of the broader N4 trillion Capital Market Multi-Instrument Issuance Programme approved by President Bola Tinubu to address longstanding financial obligations in the Nigerian Electricity Supply Industry (NESI).

The planned issuance comes less than a week after the Federal Government redeemed the first coupon and principal repayment on the maiden N501 billion bond, which fell due on July 14, 2026.

According to the government, the payment was made promptly and in full, demonstrating its commitment to meeting contractual obligations and reinforcing investor confidence ahead of the second tranche.

The debt reduction programme was introduced to resolve verified obligations owed to GenCos, whose mounting unpaid invoices have remained one of the biggest liquidity challenges confronting Nigeria’s electricity market.

The persistent debt burden has constrained electricity generation, weakened operators’ financial positions, and slowed investments across the power value chain.

Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), Johnson Akinnawo, described the forthcoming issuance as another significant milestone in the Federal Government’s efforts to restore liquidity, strengthen investor confidence and improve the long-term sustainability of the electricity market.

“The second issuance demonstrates the Federal Government’s commitment to resolving verified legacy obligations through a transparent, structured, and market-based mechanism.

“By improving liquidity across the electricity value chain, the programme will help strengthen the financial position of market participants, support new investment and promote sustainable electricity generation for the benefit of Nigerians,” Akinnawo said.

Akinnawo recalled that the Federal Executive Council approved the establishment of the N4 trillion Presidential Power Sector Debt Reduction Programme in 2025, with NBET appointed as the sponsoring institution to settle verified legacy debts in the electricity sector.

He explained that the framework provides for multiple issuances of debt instruments through NBET Finance Company Plc, a special-purpose vehicle established for the programme.

According to him, the instruments are backed by the full faith and credit of the Federal Government and supported by comprehensive risk-mitigation measures designed to ensure successful execution.

“The programme has the full backing of the Federal Government and incorporates a robust suite of instruments designed to mitigate transaction risks and support successful execution,” he said.

Akinnawo added that the issuance of the N729 billion second tranche bond would represent a decisive step towards resolving longstanding financial obligations and creating a more stable, bankable, and investment-friendly electricity market capable of supporting Nigeria’s economic growth.

MEANWHILE, Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Musiliu Oseni, has given his support to the call by the Minister of Power, Joseph Tegbe, for harmony in the multi-tier electricity market.

The minister, at a workshop in Abuja last week, themed “Legal, Policy and Regulatory Harmonisation between Federal and State Institutions on the Decentralisation of the Nigerian Electricity Supply Industry (NESI),” called for harmonisation of regulatory and operational activities in the Nigerian Electricity Market (NEM) which, he said, will ensure that power sector players work towards the common goal of increasing access to electricity supply for Nigerians as electricity remains the bedrock for the development of any nation.

Speaking at a workshop on decentralising the Nigerian Electricity Supply Industry (NESI) in Abuja, Oseni stressed the need for stronger collaboration among stakeholders to improve electricity supply nationwide.

He said Nigerians are less concerned with which institution regulates the sector and more interested in access to stable, reliable electricity.