FG Pays ₦333 Billion to GenCos, Launches Fresh ₦729 Billion Bond To Cut Power Debt
FG Disburses ₦333 Billion to GenCos, Rolls Out New Bond to Reduce Power Sector Debt
Government Advances Electricity Debt Settlement Programme
THE Federal Government has disbursed approximately ₦333 billion to eight electricity generation companies (GenCos) as part of its ongoing Power Sector Debt Reduction Initiative, while unveiling a second ₦729 billion bond issuance aimed at clearing additional legacy liabilities and restoring financial stability across Nigeria’s electricity industry.
The announcement was made during an investors’ forum organised by the Nigerian Bulk Electricity Trading (NBET) Plc in Abuja, where government officials outlined efforts to improve liquidity in the Nigerian Electricity Supply Industry (NESI) and rebuild investor confidence.
The debt settlement programme forms part of broader reforms designed to strengthen the financial sustainability of the country’s power sector and attract long-term private investment.
First Phase Strengthens Market Confidence
Special Adviser to the President on Oil and Gas, Mrs. Olu Verheijen, said the first phase of the initiative demonstrated the Federal Government’s resolve to honour verified financial obligations owed to electricity generation companies.
According to her, the government deployed ₦501 billion in February 2026 under the first series of the programme. The package comprised ₦300 billion in cash payments and ₦201 billion in bond instruments, providing immediate financial relief to participating operators.
She disclosed that ₦333 billion has already been paid to eight generation companies operating 17 power plants, while the government also honoured the first coupon payment of approximately ₦63.5 billion on the seven-year bond on 14 July 2026.
Verheijen noted that the payments have enabled beneficiary companies to meet obligations to gas suppliers, financial institutions and maintenance contractors, improving cash flow throughout the electricity value chain.
“Markets do not reward promises; they reward performance. Capital follows credibility,” she said, describing the initiative as a practical demonstration of government’s commitment to restoring investor confidence.
Debt Verification Reduces Financial Exposure
Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the Federal Executive Council approved the ₦4 trillion Power Sector Debt Reduction Initiative following a comprehensive audit of liabilities within the electricity market.
He explained that the verification exercise reduced outstanding claims from over ₦4 trillion to approximately ₦3.3 trillion after detailed validation of invoices and services rendered.
According to Oyedele, the second bond issuance valued at ₦729 billion will complete the first phase of the debt settlement programme while extending payments to additional generation companies, gas suppliers and other service providers within the electricity industry.
Power Sector Reform Targets Sustainable Electricity Supply
Minister of Power, Mr. Joseph Tegbe, described resolving the liquidity crisis as essential to achieving reliable electricity supply and supporting Nigeria’s broader economic development.
He stressed that the initiative goes beyond debt repayment, describing it as a structural reform designed to restore commercial viability and improve investor confidence in Africa’s largest electricity market.
Tegbe urged institutional investors—including pension funds, commercial banks and insurance companies—to participate in the bond programme, saying it offers an opportunity to contribute to the transformation of Nigeria’s power sector while earning competitive returns.
“Our destination is clear: a financially sustainable, investment-led electricity market that powers Nigeria’s industrial renaissance,” he said.
Investors Encouraged to Support Sector Recovery
Former Acting Managing Director of NBET, Mr. Johnson Akinnawo, also encouraged investors to participate in the second bond issuance.
He noted that the successful implementation of the first series demonstrated the credibility of Nigerian power-sector securities and reinforced confidence in ongoing reforms.
While acknowledging persistent challenges within the electricity industry, Akinnawo said sustained financial restructuring, improved market discipline and continued government commitment remain critical to achieving a stable and commercially viable electricity market capable of supporting long-term economic growth.
