FG Raises N501bn from Bond Market to Settle GenCos’ Power Sector Debts

Federal Government mobilises funds under Presidential Power Sector Debt Reduction Programme to tackle N6 trillion liabilities and improve electricity sector liquidity.

The Federal Government has raised N501.02 billion from the bond market to begin settling outstanding debts owed to power generation companies (GenCos), marking a major step in addressing Nigeria’s over N6 trillion electricity sector liabilities.

The funds were secured 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 issued at 17.5 per cent interest. The bonds were floated by NBET Finance Company Plc, a special purpose vehicle under the Nigerian Bulk Electricity Trading Plc (NBET), and are fully guaranteed by the Federal Government through the Presidential Power Sector Debt Reduction Programme (PPSDRP).

Speaking at the agreement signing ceremony in Lagos, Mrs Olu Verheijen, Special Adviser on Energy to President Bola Tinubu, said the programme was aimed at resolving long-standing arrears owed to GenCos and “resetting the electricity market.”

According to Verheijen, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements, with 14 generation companies signing Full and Final Settlement Agreements valued at roughly N827 billion.

She explained that proceeds from the Series 1 bond would fund the first and second instalment payments to participating GenCos, estimated at N421.42 billion, representing about 50 per cent of the negotiated settlement value, to be paid via a mix of cash and notes.

Finance Minister Wale Edun, represented by the Debt Management Office (DMO) Director-General, Ms Patience Oniha, emphasised that legacy power sector debts had long constrained growth, and clearing them is essential for reform and investor confidence.

NBET Acting Managing Director, Johnson Akinnawo, described the bond issuance as a “major milestone” that would enhance liquidity across the power value chain and support new investments.

Among the GenCos that signed the deal are First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.