Chief Executive Officer of Proton Energy, Mr. Oti Ikomi, has described the Federal Government’s N501 billion inaugural power sector bond as a major boost for Nigeria’s electricity industry, saying it would unlock new investments and restore confidence across the value chain.
Speaking on CNBC Africa, Ikomi said the bond issuance under the Presidential Power Sector Debt Reduction Programme (PPSDRP) was a critical step towards resolving long-standing legacy debts owed to power generation companies, which had constrained growth in the sector for more than a decade.
The N501 billion bond, which recorded 100 per cent subscription from pension funds, banks, asset managers and other investors, is designed to settle part of the estimated N4 trillion owed to generation companies (GenCos) following years of inefficiencies, subsidies and payment shortfalls in the Nigerian Electricity Supply Industry (NESI).
“It is an excellent development,” Ikomi said in the interview aired on Wednesday. “For some time now, there have been legacy debts owed to the generating companies, particularly the primary six GenCos. From the power sector reforms that began around 2013 up to 2025, about N4 trillion had accumulated as outstanding obligations.
“This bond is designed to settle part of the Disco debts and some of the GenCo debts. This first tranche of N501 billion is fully subscribed, which is a strong signal to the market.”
He noted that the settlement structure involved compromise across the board, with GenCos accepting what he estimated to be about a 40 per cent haircut, in exchange for liquidity that would allow them to stabilise operations.
“The idea is simple,” Ikomi said. “You clear old debts, take some haircuts, and get cash into the system so GenCos can invest in their plants, pay gas suppliers, improve availability and ultimately deliver more power into the value chain.”
Ikomi also pointed to renewed activity in Nigeria’s power sector capital market as evidence of growing investor confidence. He cited the $750 million Geregu Power transaction completed in December 2025, as well as the N360 billion acquisition of a 60 per cent stake in Eko Electricity Distribution Company by Transgrid Enerco Limited, also concluded in December.
“We haven’t seen transactions of this scale in the power sector for over a decade,” he said. “These are very positive signals. What is important now is for the rest of the value chain – distribution, metering and transmission – to rise to the occasion. These are exciting times for the power sector.”
Recall that the N501 billion bond is the first tranche under the Federal Government’s Power Sector Multi-Instrument Issuance Programme, a N4 trillion framework aimed at resolving verified legacy debts owed to power generation companies for electricity supplied between February 2015 and March 2025.
The issuance was executed by Nigeria Bulk Electricity Trading (NBET) Finance Company Plc, with Series 1 comprising N300 billion raised from the capital market and N201 billion in bonds allocated directly to participating GenCos.
So far, five generation companies operating 14 power plants – First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited – have signed settlement agreements with NBET. The total negotiated settlement for these companies stands at N827.16 billion, to be paid in four instalments.
Proceeds from the Series 1 bond will fund the first two instalments, estimated at N421.42 billion, representing about 50 per cent of the negotiated settlement amount. Payments will be made through a mix of cash and notes.
When fully implemented, the programme is expected to impact over 4,483 megawatts of generation capacity, settle payments for more than 290,000 gigawatt-hours of electricity supplied, and strengthen the financial foundation of companies serving over 12 million registered electricity customers nationwide.
Speaking at the bond signing ceremony in Lagos, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, described the issuance as a turning point for Nigeria’s power sector, noting that unresolved legacy debts had weakened balance sheets, discouraged investment and limited reliable electricity supply.
Similarly, the Special Adviser to the President on Energy, Olu Arowolo Verheijen, said the programme was not a bailout but a “balance-sheet reset” aimed at restoring liquidity, strengthening payment discipline and enabling operators to invest on commercial terms.
Industry leaders, including Sahara Power Group Managing Director Kola Adesina, have also welcomed the initiative, saying the settlement of historic arrears would allow GenCos to resume stalled expansion projects and attract new capital.
