The Federal Government will capture a proposed N4tn power sector bond in the updated Medium-Term Expenditure Framework to stabilise the electricity market and clear critical obligations.
Officials said the framework is being adjusted to reflect the financial pressure in the sector and the need for long-term liquidity.
Okay News reports that Power Minister Adebayo Adelabu said the intervention will support transmission expansion, settle certified debts owed to generating companies, and improve the financial position of distribution companies weakened by years of under-recovery. He noted that the government is adopting a phased approach to limit fiscal risks.
Adelabu explained that the bond will help create a predictable settlement system across the value chain. He said persistent shortfalls in payments have discouraged private investment, strained public finances, and limited the sector’s ability to raise capacity. He added that a stable repayment structure is crucial to restoring confidence among operators.
According to him, part of the bond will be channelled toward reducing technical losses, expanding metering programmes, and supporting grid modernisation. He said the ministry is working with the Transmission Company of Nigeria to prioritise congested corridors and ageing infrastructure that frequently trigger nationwide outages.
Adelabu also referenced the new Electricity Act, saying its decentralised structure will allow states to participate more actively in planning, regulation, and investment. He said the bond will be executed transparently, and all payments will undergo strict verification to prevent inflated claims.
Finance ministry officials said the updated MTEF will reflect realistic debt obligations and revenue expectations. They also noted that power reforms are tied to wider economic targets, including improved industrial output and reduced reliance on diesel-powered generation.
