AFC Commits Support to Transformative Reforms in Nigeria’s Power Sector

By Adedapo Adesanya

The Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, has reiterated its commitment to playing a pivotal role to support transformative reforms in Nigeria’s power sector.

This is as it act as co-Financial Adviser to the Nigerian government on the successful issuance of the recent N501 billion inaugural tranche under the Presidential Power Sector Financial Reforms Programme (PPSFRP), as part of the N4 trillion Power Sector Bond Programme, aimed at resolving over a decade of legacy debt obligations in Nigeria’s electricity supply industry and restoring financial stability across the sector.

AFC provided comprehensive financial advisory services to the federal government, including the design of the Programme’s negotiation strategy framework, support in negotiating and executing Settlement Agreements with Power Generation Companies (GenCos), and structuring the bond issuance. Working in partnership with CardinalStone Partners as co-Financial Advisers, AFC deployed its deep sector expertise and strong local market knowledge to deliver the landmark transaction.

The programme was overseen by the Presidential Power Sector Debt Reduction Committee (PPSDRC), with technical leadership from the Office of the Special Adviser to the President on Energy, and implemented through NBET Finance Company Plc, a special purpose vehicle of Nigerian Bulk Electricity Trading Plc (NBET). Proceeds from the issuance will be used to settle verified, overdue receivables owed to GenCos for electricity supplied between February 2015 and March 2025, injecting liquidity into the power sector and extinguishing long-standing claims.

Commenting on AFC’s involvement, Mr Banji Fehintola, Executive Board Member and Head, Financial Services at Africa Finance Corporation, said: “The successful issuance of the inaugural tranche under the Power Sector Bond Programme underscores AFC’s commitment to supporting transformative reforms in Nigeria’s power sector. By resolving long-standing liquidity challenges and restoring confidence among investors and operators, this transaction lays the foundation for sustainable growth and improved electricity supply across the country.”

When fully implemented, the programme is expected to impact approximately 5,398MW of electricity generation capacity by Nigerian GenCos and finalise settlement for 290,644.84GWh of electricity billed since 2015. It will also strengthen companies serving about 12 million active registered customers, creating a solid platform for new investments in capacity enhancement and expansion.