Nigeria’s power sector saw significant financing activity and new investments in renewable energy during Q3 2026. The quarter’s anchor transaction was the Federal Government’s ₦728.98 billion Series 2 power sector bond, arranged by CardinalStone Partners with Africa Finance Corporation (AFC) as co-financial adviser.
Deals & Advisory Report reviews key Q3 2026 developments across the sector, from Geregu Power’s bond default and the search for a new core investor in Kaduna Electric to renewable energy financing and new platforms for investment in distributed power.
Federal Government Raises ₦728.98 Billion in Series 2 Power Sector Bonds
The Federal Government raised ₦728.979 billion through the second issuance under its Power Sector Multi-Instrument Issuance Programme in September 2026, bringing total issuances under the programme’s first phase to approximately ₦1.23 trillion. The transaction is part of efforts to settle verified legacy obligations owed to electricity generation companies for power supplied between February 2015 and March 2025.
Issued through NBET Finance Company Plc, a special-purpose vehicle of Nigerian Bulk Electricity Trading Plc (NBET), the seven-year, government-guaranteed bond comprised ₦402 billion in cash bonds raised from domestic investors and ₦326.979 billion in non-cash bonds allotted to participating generation companies. Eleven GenCos participated in the Series 2 issuance, compared with eight in Series 1, completed in January 2026. The cash tranche was oversubscribed and priced at a clearing rate of 18%.
Advisory mandates: CardinalStone Partners acted as Lead Financial Adviser and Lead Issuing House, working alongside Africa Finance Corporation (AFC), which served as Co-Financial Adviser. The joint issuing-house syndicate comprised Comercio Partners Capital, Cordros Advisory Services, Coronation Merchant Bank, Emerging Africa Capital Advisory, FSDH Capital, IRON Capital Markets, Meristem Capital, Renaissance Securities Nigeria and United Capital. Olaniwun Ajayi LP acted as Solicitor to the Issue, while ENR Advisory Limited served as Solicitor to the Issuer.
The issuance followed the successful payment of the first coupon and principal instalment on the Series 1 bonds in July 2026. Together, the two issuances advance implementation of the Federal Government’s ₦4 trillion programme to address legacy electricity-sector liabilities and improve liquidity across the electricity and gas value chains. The broader programme is expected to support generation capacity of approximately 5,398 MW.
NSIA and Africa50 Launch US$300 Million Fund for Nigeria’s Distributed Renewable Energy Market
Nigeria’s renewable energy investment landscape gained a new financing platform in September 2026 with the commercial launch of the US$300 million Nigeria Distributed Renewable Energy (DRE) Fund, established by the Nigeria Sovereign Investment Authority (NSIA), Africa50 and Sustainable Energy for All (SEforALL). Announced on the sidelines of the 81st United Nations General Assembly in New York, the launch marked the fund’s transition from structuring towards capital deployment.
The fund is designed to mobilise investment in distributed renewable energy projects, including mini-grids and standalone solar systems, targeting communities and businesses underserved by Nigeria’s conventional electricity infrastructure. NSIA and Africa50 will co-manage the vehicle, combining domestic investment expertise with Africa50’s infrastructure investment and fund-management capabilities. SEforALL brings energy-access expertise, while the World Bank is a founding partner.
The World Bank has provided an initial US$25 million contribution through the International Development Association (IDA). This represents an identified contribution to the platform, rather than evidence that the entire US$300 million fund target has already been raised or deployed. The fund is also aligned with Mission 300, the initiative to connect 300 million people across Africa to electricity by 2030.
NSIA and Africa50 are the fund’s co-managers, with SEforALL providing energy-access leadership and the World Bank serving as a founding partner and contributing initial catalytic capital through IDA. The International Solar Alliance has also identified the vehicle as a potential model for replicating distributed renewable energy investment platforms across Africa.
Geregu Power Defaults on ₦40.09 Billion Bond Before Repayment in August
Geregu Power Plc defaulted on its ₦40.085 billion Series 1 senior unsecured bond in August 2026, missing its eighth coupon payment and fourth scheduled principal repayment on the seven-year instrument. The bond, issued on 28 July 2022 under the company’s ₦100 billion multi-instrument issuance programme, carries a 14.5% coupon and is scheduled to mature on 28 July 2029.
The default prompted credit-rating action from GCR Ratings, which downgraded Geregu Power’s long- and short-term issuer ratings from A(NG) and A1(NG), respectively, to D(NG) on 10 August. The agency also downgraded the Series 1 bond to D(NG), reflecting the missed debt-service payments. Separately, Agusto & Co withdrew its A- rating on the company and the bond, citing the default and concerns about the reliability of financial information available for its credit assessment.
Geregu subsequently said it was engaging relevant stakeholders and advisers to resolve the repayment issues. On 20 August, the company disclosed to the Nigerian Exchange that the eighth coupon and part of the principal repayment had been paid to the bond trustees, following reports that approximately ₦6 billion had been settled. The company also said it would continue addressing legacy matters predating the current board.
NERC Moves to Replace Kaduna Electric’s Core Investor After ₦456.5bn Debt Crisis
The Nigerian Electricity Regulatory Commission (NERC) moved to replace Africa Smart Investment (ASI), the core investor in Kaduna Electricity Distribution Plc (Kaduna Electric), following mounting market debts and persistent operational underperformance.
In an order issued on 10 August 2026, NERC dissolved the company’s board, appointed an interim board and administrator, and directed the African Export-Import Bank (Afreximbank) to coordinate a competitive process to secure a replacement investor within 12 months.
ASI assumed effective operational control in June 2024 after receiving conditional approval to acquire a 60% majority stake. By May 2026, Kaduna Electric had accumulated approximately ₦456.5 billion in market obligations, including debts to Nigerian Bulk Electricity Trading Plc and the Nigerian Independent System Operator.
The regulator also cited inadequate capital expenditure and high network losses. The company invested approximately ₦2.48 billion in 2025, against a regulatory minimum of ₦24.51 billion.
Under the replacement process, prospective investors must demonstrate financial capacity, technical expertise, credible funding and a five-year business plan. The interim administration is expected to stabilise operations while the search for a new investor proceeds. The proposed change in control remains at the investor-selection stage. No successor investor has been confirmed as of October 2026.
REA, MOFI and InfraCorp Launch Renewable Asset Management Company
The Rural Electrification Agency (REA), the Ministry of Finance Incorporated (MOFI) and the Infrastructure Corporation of Nigeria (InfraCorp) launched the Renewable Asset Management Company (RAMCO) on 26 August 2026 to manage and sustain publicly funded renewable energy infrastructure.
The platform is designed to address the deterioration of renewable energy projects after commissioning through professional operations, maintenance, metering, and revenue collection. REA said an assessment of seven solar hybrid projects under the first phase of its Energising Education Programme found that only three remained in good or usable condition.
REA will conduct technical assessments and valuations of existing assets before working with MOFI and InfraCorp on their transfer to RAMCO. The model is intended to reduce reliance on repeated government funding for maintenance and create a commercially sustainable framework that could attract private capital.
REA Secures ₦50 Billion Financing Commitment from Alpha Morgan Bank for Renewable Energy Projects
The Rural Electrification Agency (REA) secured a financing commitment of up to ₦50 billion from Alpha Morgan Bank to support renewable energy developers delivering electricity projects in underserved communities across Nigeria. The agreement, signed on 21 August 2026, is designed to bridge funding gaps for developers implementing REA-led programmes, including the Distributed Access through Renewable Energy Scale-up (DARES) Project.
Under the arrangement, eligible developers can access revolving loans of up to ₦10 billion each, with tenors of 12 to 24 months, subject to the bank’s credit assessment and approval. Alpha Morgan Bank will provide up to 70% counterpart financing for qualifying projects.
The facility is intended to address a financing constraint associated with results-based funding programmes, under which developers must execute projects and meet specified requirements before receiving grant payments. The arrangement is expected to provide working capital for equipment procurement and project implementation while linking public-sector grant support with commercial bank financing.
REA Managing Director Abba Abubakar Aliyu said the partnership would help developers move from project approval to implementation more quickly. Under the framework, REA will facilitate project approvals, grant agreements and verification, while Alpha Morgan Bank will provide financing and financial advisory support to eligible developers.
All On and Energise Africa Invest US$4 Million in Maskh’s Nigerian Solar Mini-Grids
All On and UK-based impact investment platform Energise Africa have committed US$4 million to Maskh Nigeria Limited to develop solar-powered mini-grids across 19 communities in Jigawa and Bauchi States, expanding electricity access in underserved parts of northern Nigeria. Announced on 31 August 2026, the investment is expected to benefit nearly 100,000 people, including households, businesses, schools and healthcare facilities.
The investment is being made under the Demand Aggregation for Renewable Energy Technology (DART) Programme. Maskh will develop and deploy the mini-grids, with the funding intended to expand its renewable energy infrastructure and strengthen its capacity to serve communities with limited access to reliable electricity.
The transaction combines All On’s energy-access investment capital with funding mobilised through Energise Africa, which enables individual investors to finance clean-energy businesses. Energise Africa’s Maskh bond offering raised £600,000 from retail investors, providing a component of the wider project financing. The project also has results-based financing support from the Rural Electrification Agency (REA), linking grant payments to verified delivery of infrastructure and electricity connections.
REPP 2 Provides Debt Financing for Five Prado Power Solar Mini-Grids in Nigeria
Camco-managed Renewable Energy Performance Platform 2 (REPP 2) has provided a senior debt facility to Prado Power Group to finance the construction and operation of five solar mini-grids with battery storage across Benue and Nasarawa States. Announced on 30 September 2026, the transaction supports the expansion of distributed renewable energy infrastructure in underserved Nigerian communities.
The five projects will have a combined 1.84 MWp of solar photovoltaic capacity and 5.2 MWh of battery storage, targeting more than 12,000 connections for households and micro, small and medium-sized enterprises. The financing amount was not disclosed.
The projects are supported by the World Bank Group’s Distributed Access through Renewable Energy Scale-up (DARES) programme, facilitated by the Rural Electrification Agency (REA). The programme’s performance-based subsidies complement the debt financing, helping developers fund construction and expand electricity access.
