The Federal Government has successfully raised N501.02 billion from the bond market to begin addressing outstanding debts owed to power generation companies (GenCos), part of efforts to tackle the over N6 trillion liabilities plaguing the electricity sector.
The funds were mobilized through two bond tranches: a N300 billion seven-year Series 1 Tranche A bond and a N201.02 billion seven-year Series 1 Tranche B bond, both priced at 17.50 percent. Issued by NBET Finance Company Plc, a special purpose vehicle created by the Nigerian Bulk Electricity Trading Plc (NBET), the bonds are fully guaranteed by the Federal Government under the Presidential Power Sector Debt Reduction Programme (PPSDRP).
At the signing ceremony in Lagos, the Special Adviser on Energy to President Bola Tinubu, Mrs. Olu Verheijen, said the initiative aims to resolve long-standing arrears owed to GenCos and to reset the country’s electricity market. She revealed that the verified receivables for electricity supplied between February 2015 and March 2025 are being settled under negotiated agreements, with 14 generation companies having signed Full and Final Settlement Agreements totaling approximately N827 billion.
The proceeds from the bond issuance will be used for the first and second instalment payments to participating GenCos, estimated at N421.42 billion, representing about 50 percent of the total negotiated settlement value. Payments will be made through a combination of cash and promissory notes.
Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, represented by Ms. Patience Oniha, Director-General of the Debt Management Office (DMO), acknowledged that the legacy debts in the power sector had hindered growth for years, emphasizing that resolving them is crucial for the reform of the sector.
NBET’s Acting Managing Director, Mr. Johnson Akinnawo, described the bond issuance as a significant step toward improving liquidity within the power sector and encouraging new investments.
Key GenCos that signed the settlement agreements include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.
