The Federal Government has paid N333 billion to electricity generation companies (GenCos) under the first phase of its power sector debt financing programme, as it moves to address longstanding liquidity challenges that have constrained investments across Nigeria’s electricity value chain.
The payment forms part of approximately N501 billion deployed under Series I of the Power Sector Multi-Instrument Issuance Programme, a financing framework established to settle verified legacy debts owed to market participants and improve the financial health of the power sector.
The government also announced plans to raise approximately N729 billion through a Series II bond issuance to continue the settlement of outstanding obligations and deepen liquidity across the electricity market.
Speaking at the Nigerian Bulk Electricity Trading (NBET) Finance Company Plc Series II Bond Issue Investors’ Forum in Abuja on Tuesday, the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, said the administration had fulfilled all commitments made under the first tranche of the programme, including the payment of the first bond coupon.
According to her, the government deliberately prioritised execution and credibility before returning to the capital market for additional fundraising.
“Every successful capital market tells the same story. Investors return where governments keep their promises,” Verheijen said.
“President Bola Tinubu’s administration has demonstrated, beyond doubt, its commitment to making a clean break from the fiscal dysfunction that once defined Nigeria’s power sector.”
Providing details of the programme, Verheijen disclosed that approximately N501 billion was deployed in February 2026, comprising N300 billion in cash and N201 billion in non-cash bond instruments.
She said the funding addressed about 22 per cent of the settlement obligations covered under executed agreements with market participants.
Of the amount disbursed, N333 billion has been paid to eight participating generation companies operating 17 power plants across the country.
“We have met our obligations on schedule. The first Series I coupon, about N63.5 billion, was paid in full on July 14, 2026,” she stated.
The government believes the settlement programme will help convert longstanding liabilities into fresh liquidity capable of supporting investments throughout the electricity value chain.
According to Verheijen, sustained liquidity would improve operational performance, strengthen market confidence and support broader reforms aimed at achieving a financially sustainable electricity sector.
“We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity,” she said.
“That liquidity, if sustained, will strengthen the entire electricity value chain, improve operational performance, and restore confidence across the sector.”
Following the completion of the first phase, the government is seeking to raise approximately N729 billion through a Series II bond issuance.
The proceeds are expected to support the settlement of additional verified legacy debts owed to GenCos and further stabilise Nigeria’s electricity market.
Verheijen said the successful execution of Series I had strengthened investor confidence and demonstrated the government’s commitment to honouring contractual obligations.
“Bankability doesn’t begin in financial markets. It begins with governments that honour their contracts, that meet their obligations, that create predictable rules. Capital follows credibility,” she said.
Analysts say the planned issuance could improve cash flow across the electricity value chain, enabling generation companies to meet operational commitments and invest in infrastructure upgrades.
The move is also expected to support broader efforts to attract private capital into Nigeria’s power sector, which continues to face funding constraints despite ongoing reforms.
The Acting Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, said the success of Series I demonstrated that Nigerian power sector debt instruments could attract investor confidence when structured transparently and backed by government commitment.
“When we came to the market with Series I, we did not present it as a routine capital raise,” Akinnawo said.
“We presented it as a test of a proposition, that Nigerian legacy power sector debt could be resolved through disciplined, transparent capital market instruments rather than endless promises.”
According to him, improved liquidity is already becoming evident across the electricity value chain, helping to restore confidence among investors and industry stakeholders.
“Nigerian power sector paper has proven that it is bankable,” he added.
Nigeria’s electricity industry has struggled with liquidity shortages for more than a decade, largely due to accumulated debts owed to generation companies and other market participants.
Stakeholders have repeatedly warned that unresolved payment obligations have weakened investments, reduced operational efficiency and limited the ability of companies to expand electricity generation and distribution infrastructure.
The Power Sector Multi-Instrument Issuance Programme was established under the Presidential Power Sector Financial Reforms Programme to address these challenges through structured financing solutions.
Under Series I, the government deployed N501 billion, comprising N300 billion in cash and N201 billion in bond instruments, settling about 22 per cent of verified obligations under executed settlement agreements.
With the proposed N729 billion Series II bond, the government hopes to accelerate debt resolution, improve market liquidity and create conditions for increased investment in power infrastructure.
