Nigeria’s power sector debt surged 62.5% to ₦6.5 trillion in 2025, while electricity generating companies (GenCos) received just 35% of billed ₦1.53tr, worsening the liquidity crisis.
Experts warn the FG’s ₦1.23tr power bond is risky due to poor electricity distribution companies (DisCos) collections and unbacked subsidies, threatening investment and power supply growth.
Recall that the Government had flagged off the funding program through the issuance of ₦590 billion Series-1 Power Sector Bond in mid-December 2025, as part of a plan to raise ₦1.23 trillion by the end of the first quarter of 2026 to improve system liquidity in 2026.
The power sector has been shackled in decades by huge debts which hampered investment in critical infrastructure needed to boost power supply in the country.
However, the first part issuance, comprising ₦300 billion Tranche-A and ₦290 billion Tranche-B, has raised concerns over transparency and the overall performance of the sector liquidity.
With the Federal Government failing to meet its financial obligations, industry data showed that GenCos were paid just 35 per cent of their invoices for electricity supplied to the national grid, further compounding the liquidity crisis in the Nigerian Electricity Supply Industry.
The NERC third-quarter report showed that total revenue collected by all DisCos in Q3 2025 stood at ₦570.25 billion, out of ₦706.61 billion billed to customers, representing a collection efficiency of 80.7 per cent. The revenue was boosted by the continued migration of customers to the Band-A tariff category, despite widespread blackouts across the country.
Despite objections from the GenCos over the structure of the bond and contractual arrangements governing payments from bond proceeds, the Federal Government has pressed ahead with the policy. The companies, however, continue to demand transparency in the process.
