The Federal Government has raised N1.23 trillion through two bond issuances as part of efforts to settle outstanding debts owed to electricity generation companies, known as GenCos.
The funds were raised under the Presidential Power Sector Debt Reduction Programme, which was introduced to address long standing financial obligations in Nigeria’s electricity industry. The latest development was disclosed by Akin Odeyemi, Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), in Abuja on Monday, according to the News Agency of Nigeria.
Odeyemi said the government raised N728.9 billion through the second series of the bond programme. This followed the N501 billion raised under the first series in January. The second bond issuance, which began in August, attracted 11 GenCos, compared with eight companies that participated in the first transaction. According to Odeyemi, the wider participation shows that stakeholders are gaining more confidence in the government’s approach to addressing the sector’s financial problems.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme,” Odeyemi said.
The N728.9 billion raised through the second series will be implemented through two tranches known as Tranches A and B. Odeyemi explained that unpaid obligations had placed significant financial pressure on companies operating within the electricity market. He said the situation had also affected the ability of GenCos to invest in increasing electricity generation capacity. The NBET chief executive said the programme was not only designed to clear old debts but also to improve liquidity and restore confidence across the electricity supply industry.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said the second series consisted of N402 billion in cash bonds and N326.9 billion in non cash bonds allocated to participating GenCos. The bonds were issued under the Presidential Power Sector Debt Reduction Programme to address accumulated financial obligations across the electricity value chain.
Oyedele, however, warned that paying the outstanding debts alone would not solve all the problems facing Nigeria’s power sector.
“This means that the bond programme cannot stand alone,” he said.
He said the government must also strengthen market discipline, improve revenue collection, reduce technical and commercial losses and ensure greater accountability across the sector. According to him, the Federal Government is using the domestic capital market to settle legitimate legacy obligations through a structured process.
Power Minister Joseph Tegbe said the latest bond issuance demonstrated the government’s commitment to addressing some of the structural problems affecting the electricity industry. He added that the initiative was intended to improve the financial position of the sector and create better conditions for more reliable electricity supply.
Olu Verheijen, Special Adviser to President Bola Tinubu on Oil and Gas, said the first series resulted in settlement agreements with 11 GenCos covering 21 power plants. The Federal Executive Council had earlier approved a N4 trillion Power Sector Debt Reduction Initiative after the government carried out a detailed verification of outstanding claims. The verification reduced the identified liabilities from more than N4 trillion to about N3.3 trillion after claims were reviewed individually.
Under the first phase, N333 billion has already been paid to eight GenCos covering 17 power plants. The government also made the first coupon payment of about N63.5 billion on the seven year bond on July 14, 2026. The payment allowed participating generation companies to meet some obligations to gas suppliers, lenders and operations and maintenance contractors.
The government says the second bond issuance will expand the debt settlement programme and extend payments to more participants across the electricity value chain.
