The Federal Government has raised about N1.23 trillion through two bond issuances to settle verified debts owed to electricity generation companies (GenCos), as it moves to address persistent liquidity challenges in Nigeria’s power sector.
The Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, disclosed this in Abuja on Monday.
Mr Odeyemi said the government raised N501 billion through the first series of the Presidential Power Sector Debt Reduction Programme in January and a further N728.9 billion through the second series launched in August.
The second issuance attracted 11 GenCos, compared with eight participants in the first transaction.
Mr Odeyemi said the increased participation reflected growing confidence in the programme, which is aimed at addressing longstanding financial obligations across the electricity value chain.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme,” he said.
According to Mr Odeyemi, the N728.9 billion raised under Series 2 will be implemented through two tranches, Tranches A and B.
The NBET chief said accumulated unpaid obligations had weakened the finances of companies operating within the electricity market and limited GenCos’ ability to invest in additional generation capacity.
He said the debt reduction programme should therefore not be viewed solely as an exercise to clear historical liabilities but also as an attempt to restore liquidity and confidence across the Nigerian electricity supply industry.
The development comes as the government seeks to address the financial pressures that have persisted across the power value chain, including payment obligations between electricity market participants.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said Series 2 comprised N402 billion in cash bonds and N326.9 billion in non-cash bonds allocated to participating GenCos.
Mr Oyedele said the transaction was designed to address accumulated obligations that had weakened liquidity and confidence throughout the electricity value chain.
He, however, cautioned that clearing the legacy debts would not by itself resolve the sector’s financial problems.
“This means that the bond programme cannot stand alone,” he said.
The minister called for stronger market discipline, improved revenue assurance, lower technical and commercial losses and greater accountability across the electricity ecosystem.
He said the Federal Government was using the domestic capital market to address legitimate legacy obligations through a structured process.
The Federal Executive Council had approved a N4 trillion Power Sector Debt Reduction Initiative after the government conducted a comprehensive verification of outstanding liabilities.
The verification exercise subsequently reduced outstanding claims from more than N4 trillion to about N3.3 trillion following a line-by-line validation of services rendered.
Under the first series of the programme, N333 billion has so far been paid to eight GenCos covering 17 power plants.
The first coupon payment of about N63.5 billion on the seven-year bond was made in full on 14 July 2026.
The government said the payment enabled participating generation companies to meet obligations to gas suppliers, lenders and operations and maintenance contractors.
Olu Verheijen, Special Adviser to President Bola Tinubu on Oil and Gas, said Series 1 resulted in settlement agreements with 11 GenCos covering 21 power plants.
She said Series 2 would build on the first phase by extending implementation of the debt reduction framework.
The latest issuance brings the amount raised under the first two series to approximately N1.23 trillion.
The government plans to issue up to N4 trillion in government-backed bonds under the broader programme to settle legacy obligations owed to GenCos and other participants in the electricity value chain.
