By Comfort Asemota
Investors interested in opportunities to boost liquidity in Nigeria’s power sector have under nine days to subscribe to the N590bn Series 1 Power Sector Bond issued by NBET Finance Company Plc, with the offer set to close on December 30, 2025.
The bond, launched under the N4tn Presidential Power Sector Debt Reduction Programme, is aimed at settling long-standing debts owed to electricity generation companies (GenCos) and strengthening liquidity in the Nigerian electricity market.
According to a notice sent to prospective investors by financial adviser CardinalStone Partners Limited, the bond offer, which opened on December 19, represents the first tranche of a broader N4tn Power Sector Debt Reduction initiative approved by the Federal Executive Council.
NBET Finance Company Plc, the issuer, is a Special Purpose Vehicle (SPV) sponsored by the Nigerian Bulk Electricity Trading Plc, a government agency, with the bond fully guaranteed by the Federal Government of Nigeria.
The programme, approved under President Bola Ahmed Tinubu, targets the settlement of legacy debt accumulated between February 2015 and March 2025 while enhancing investor confidence across the electricity value chain.
The advisory notice stated: “CardinalStone Partners Limited is pleased to announce the launch of the NBET Finance Company Plc N590bn Series 1 Power Sector Bond Issue under its N4tn Multi-Instrument Issuance Programme. The offer is now open and scheduled to close on 30 December 2025.”
As part of the initiative, President Tinubu established the Presidential Power Sector Debt Reduction Committee, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. The committee is tasked with creating a fiscally responsible framework to settle NBET’s debts to GenCos and restore market confidence.
Following the committee’s recommendations, the Federal Executive Council approved a structured N4tn debt programme to offset verified unpaid invoices owed to generation companies between February 2015 and March 2025.
The programme’s debt resolution strategy is anchored on three key pillars: the establishment of the N4tn settlement framework, execution of settlement agreements with participating GenCos at agreed discounts, and implementation of mechanisms to prevent future debt accumulation in the electricity market.
Proceeds from the N590bn Series 1 bond are primarily expected to settle NBET’s outstanding liabilities to GenCos during the covered period. The bond benefits from full Federal Government backing and includes additional credit enhancements such as eligibility for pension fund investments, classification as liquid assets by the Central Bank of Nigeria, and tax exemptions approved by the Ministry of Finance.
The issuance is divided into two tranches: Tranche A, a N300bn cash bond, and Tranche B, a N290bn non-cash bond. Both have a seven-year tenor with a fixed-rate semi-annual coupon and amortising repayment structure. The price range is between 16.75% and 17.00%, with a minimum subscription of N5m and additional investments allowed in multiples of N1m. The bonds will be listed on the Nigerian Exchange Limited and/or FMDQ Securities Exchange Limited, with an indicative settlement date of January 8, 2026.
CardinalStone Partners Limited is serving as Lead Issuing House and Financial Adviser, with Africa Finance Corporation as Joint Financial Adviser. Despite government assurances, some industry stakeholders have raised concerns about the SPV structure created for the bond issuance.
One source, speaking anonymously due to confidentiality restrictions, questioned the legality and transparency of the SPV and whether the Nigerian Electricity Regulatory Commission’s licence to NBET permits the creation of such an entity to assume market liabilities. They also raised questions about the SPV’s shareholders and the rationale for transferring GenCos’ liabilities to an unfamiliar entity.
Additional concerns were raised regarding why the Federal Government did not issue the bond directly, citing the involvement of multiple financial advisers and the potential impact of associated fees on the N4tn debt programme or federal budget.
