The Federal Government has moved closer to resolving Nigeria’s long-standing power sector debt after five electricity generation companies signed settlement agreements under the Presidential Power Sector Debt Reduction Programme, backed by a N501bn bond issuance.
The bond, issued in Lagos on Tuesday, was fully subscribed by institutional investors including pension funds, banks and asset managers, reflecting renewed confidence in the government’s reform agenda for the electricity market.
The programme targets an estimated N4tn in legacy debts owed to power generation companies for electricity supplied over the past decade. Industry stakeholders say the arrears have strained liquidity across the Nigerian Electricity Supply Industry, weakened balance sheets and stalled fresh investment.
At the signing ceremony, the Managing Director of the Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, described the initiative as a turning point for the sector, noting that it signals strong political commitment to restoring market discipline and revitalising electricity generation.
The Special Adviser to the President on Energy, Olu Verheijen, said the Series 1 Power Sector Bond, executed through NBET Finance Company Plc, raised N501bn, comprising N300bn from the capital market and N201bn issued directly to participating generation companies.
She explained that the programme covers verified receivables for electricity supplied between February 2015 and March 2025, which are being settled through negotiated agreements. Five generation companies operating 14 power plants nationwide, First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited, have so far signed agreements with NBET.
According to Verheijen, the total settlement value for the five companies stands at N827.16bn, to be paid in four instalments. Proceeds from the Series 1 bond will fund the first two instalments, estimated at N421.42bn, representing about half of the negotiated amount.
Power sector operators say clearing the arrears will improve liquidity, enable better maintenance and debt servicing, and unlock stalled investments. Sahara Power Group’s Managing Director, Kola Adesina, said resolving the legacy debts would restore investor confidence and allow power producers to expand capacity.
When fully implemented, the programme is expected to affect over 4,483 megawatt-hours of generation capacity and settle payments for more than 290,000 gigawatt-hours of electricity billed since 2015. The initiative is also projected to support reliable power supply for over 12 million registered electricity customers nationwide.
The Federal Government said the programme combines transparent capital market financing with validated claims and phased settlements, laying a foundation for sustainable investment and long-term stability in Nigeria’s power sector.
