The Federal Government has paid N333 billion to eight electricity generation companies (GenCos) as part of its programme to clear long-standing debts in Nigeria’s power sector.
The payment, which covers 17 power plants, represents the first phase of the government’s debt settlement plan aimed at improving liquidity across the electricity value chain and encouraging fresh investment in the sector.
At the same time, the government announced plans to issue a second bond worth about N729 billion to settle additional verified legacy debts owed to generation companies.
Speaking at the Nigerian Bulk Electricity Trading (NBET) Finance Company Plc Series II Bond Issue Investors’ Forum in Abuja on Tuesday, the President’s Special Adviser on Energy, Olu Verheijen, said the Tinubu administration is committed to restoring financial stability in the electricity market through consistent policy implementation and timely settlement of obligations.
She explained that the first bond issuance, launched earlier this year, mobilised about N501 billion through a mix of cash payments and bond instruments. According to her, the government has fulfilled its commitments under that programme, including the payment of the first bond coupon in July, helping to improve confidence among investors and market participants.
Verheijen said the settlement has enabled participating generation companies to meet financial obligations such as gas payments, debt servicing and operation and maintenance costs, which had previously been constrained by liquidity challenges.
She added that the planned second bond issuance will extend the debt repayment programme, improve cash flow within the power sector and strengthen the financial foundation needed to attract more private investment.
The Acting Managing Director and Chief Executive Officer of NBET, Johnson Akinnawo, said the successful execution of the first bond programme demonstrated that legacy debts in the electricity sector could be resolved through structured capital market financing rather than repeated government promises.
He noted that the government met all repayment obligations under the first issuance, describing it as a key factor in building investor confidence ahead of the proposed N729 billion Series II bond.
Also speaking at the event, the Minister of Power, Joseph Tegbe, described the debt settlement initiative as a major reform designed to restore the commercial viability of Nigeria’s electricity market.
He urged institutional investors, including pension fund administrators, insurance firms and banks, to support the new bond issuance, saying stronger financing for the power sector is essential to improving electricity supply and driving economic growth.
