Tinubu’s Bold Bond Initiative Beyond Bailouts, Reshapes Nigeria’s Power Sector

By Princess Gloria Adebajo-Fraser

Nigeria’s power sector has long been burdened by debt, inefficiency, and unmet promises since its 2013 privatisation. Enter President Tinubu’s bold and unprecedented N4 trillion bond initiative—a decisive move that transcends mere bailouts. This visionary effort ties financial relief to rigorous audits, transparency, and systemic reforms, restoring investor confidence and laying the groundwork for sustainable industrial transformation. By confronting legacy debts with integrity and strategic investment, Tinubu is not only reigniting Nigeria’s electricity grid but also setting a new governance standard, offering a beacon of hope for a sector crucial to the nation’s economic future.

Legacy of an ailing power sector

Since the 2013 privatisation of Nigeria’s electricity industry, the sector has faced chronic challenges, including tariff under-recovery, gas supply bottlenecks, unpaid subsidies, and poor transmission networks. These systemic failures pushed GENCOs into liquidity distress, forcing NBET to resort to high-cost commercial credit to make partial payments. Under past administrations, these perennial issues remained unresolved until President Tinubu took office.

What was announced?

President Tinubu met with leaders of the Association of Power Generation Companies, led by retired Col. Sani Bello, to address N4 trillion in debt claims dating back to 2015. He granted anticipatory approval for a bond issuance through the Debt Management Office, but made it clear that only validated debts would be included in the issuance. He appealed for patience as auditors and legal teams conduct meticulous verification. He warned bankers against foreclosing on GENCO assets, urging a spirit of partnership.

“Sharpen your pencils, but keep an eraser handy. Let’s persevere together,” said the president.

Assessing the situation, it became evident that total claimed debts from 2015 to 2023 amount to N4 trillion, of which N1.8 trillion have been validated as of April 2025, with an additional N200 billion in unfunded subsidy debts still pending reconciliation. Installed generation capacity has increased from 13,000 MW to 14,000 MW, while the peak output recorded on March 4, 2025, reached 5,801 MW. The sector’s annual revenue has grown by 70%, rising from N1 trillion in 2023 to N1.7 trillion in 2024, accompanied by a subsidy reduction exceeding N700 billion within one year.

Olu Verheijen, Special Adviser on Energy, noted that out of the N4 trillion in claims, ₦1.8 trillion has been confirmed as valid across 27 GENCOs. Only those debts verified as legitimate will be factored into the bond issuance. Also, Adebayo Adelabu, Minister of Power, noted that since President Tinubu took office, investor confidence has been restored. He reiterated that new legislation has been enacted and policy frameworks updated, resulting in Nigeria attracting over $2 billion in private investment.

Tony Elumelu, a business leader, said concerning the president, “We came to you as a last hope. We owe the system. If nothing is done, assets will shut down because the system owes us.”

With a matching magnanimity and shrewdness, the president declared, “I accept the assets and liabilities of my predecessors — but only on credible grounds. This is not deodorant over old stains. This is building support for industrial transformation.”

Analysis: Why this bond matters

First is the case of economic stability and investor confidence. The bond issuance is a first-of-its-kind intervention designed to resolve historical debts. It signals to investors that Nigeria is serious about honoring obligations and stabilizing the power sector.

The second point is that of being reform-driven, rather than bailout-oriented. Tinubu’s insistence on audit and validation before payment underscores his commitment to transparency and accountability, not populism.

There is a need to strike a balance between people and economics. Electricity reform under Tinubu isn’t about costing the state; it’s about empowering citizens and businesses. Increased generation capacity, metering, and tariff rationalisation anchor long-term affordability.

Lastly, it is a case of systemic structural change. Through the Electricity Act 2023 and the Integrated National Electricity Policy, Nigeria now operates a decentralised and competitive power market, which reinforces federal–state roles and attracts new capital.

Comparative insight: Global parallels

Globally, nations grappling with power-sector debt often issue infrastructure bonds, such as those from India, Brazil, and South Africa, among others. These bonds are tied to reform, not relief. Tinubu’s model reflects that pattern: bond issuance contingent on audit and transparency. In summary, the benefits and impacts include liquidity relief that prevents plant shutdowns and strengthens the operations of GENCOs; sector stability that safeguards against asset seizures and investor panic; reform leverage through auditing that drives efficiency, reduces waste, and supports policy reforms; economic multiplicity as reliable power fuels industrial growth and job creation; and governance credibility that reinforces President Tinubu’s reputation as a proactive and effective leader.

Final word: Tinubu’s bond move is pragmatic leadership

President Tinubu’s bond initiative is both bold and pragmatic, rooted in the realities of Nigeria’s electricity crisis. It is neither populist nor reactive. It is reformative and people-centred. As the bond proceeds through verification, Nigeria watches not only a sector being rescued, but a legacy of integrity being hardwired into governance. In the search for light, this bond may just be the spark we need.

For the first time in Nigeria’s history, a president has committed bond financing to rescue the power sector from collapse. This is not just a financial lifeline — it’s a structural reset. Tinubu is restoring trust in energy governance. No other administration has intervened so boldly. This bond is not about debt — it’s about discipline and direction.

The World Bank (Energy Outlook 2024) previously warned of Nigeria losing over $25 billion annually to unreliable power. It noted that liquidity injection without governance reform is dangerous. But Nigeria’s “new energy policy aligns both — that’s the right path”. Tinubu’s action directly tackles that loss. Tinubu is not throwing money at the problem. He’s linking financing to reform, accountability, and results.

“This inheritance is not deodorant. It’s a launchpad for industrial transformation — backed by facts, not fiction,” stated Tinubu.

Therefore, by demanding audits, Tinubu is setting a new governance benchmark in how state liabilities are handled.

Additionally, the ₦4 trillion bond is tied to audited verification, and that is a first in African utility bailouts. The AU praised Nigeria’s decentralisation of power regulation under the Electricity Act 2023; the bond is a powerful follow-through.

AU Energy Commissioner, Amani Abou-Zeid, said, “Access to electricity is access to development. Nigeria is showing that financial reform and structural decentralisation must go hand-in-hand.”

This model could become a prototype for Africa: federal, investment-backed, and reform-driven.

The IMF noted that systemic arrears in utility sectors often spill into fiscal instability. Tinubu’s programme closes that leakage.

According to the IMF Energy Sector Fiscal Risk Report (2023), clearing public utility debt must be accompanied by cost-reflective tariffs, improved metering, and private sector confidence. It observed that Nigeria “is on track”. This bond is not just about electricity. It is about macroeconomic credibility.

What is unfolding is a transition from blackout to breakthrough as Tinubu sets Nigeria’s electricity sector on a path of reform. The bond announcement comes on the heels of a 70% revenue boost in the sector and over ₦700 billion in subsidy savings — a clear sign that reform is working.

“This is governance with teeth. Tinubu isn’t afraid to audit the past or fund the future. That’s how legacy is built,” said The National Patriots.

This is real policy courage. While others feared to touch the GENCO debt, Tinubu confronted it with vision and structure.

•Princess Gloria Adebajo-Fraser, MFR, is the founder of The National Patriots.