FG pays N330bn to GenCos, issues N729bn bonds to investors

By Obas Esiedesa

The Federal Government on Tuesday disclosed that it has paid about N333 billion to eight electricity generation companies (GenCos) under its power sector debt settlement programme, and launched a second N729 billion bond issuance aimed at clearing more legacy debts and restoring liquidity in the Nigerian Electricity Supply Industry (NESI).

Speaking at an investors’ forum organised by the Nigerian Bulk Electricity Trading (NBET) Plc in Abuja, government officials said the new bond would complete the first phase of the Presidential Power Sector Debt Reduction Programme, which seeks to resolve verified legacy liabilities and attract fresh investment into the electricity sector.

Special Adviser to the President on Oil and Gas, Mrs Olu Verheijen, said the first series of the programme had demonstrated the Federal Government’s commitment to honouring its obligations, helping to restore confidence among investors and market participants.

She disclosed that in February 2026, the government deployed about N501 billion under the first series of the programme, comprising N300 billion in cash and N201 billion in non-cash bond instruments, to settle part of the verified debts owed to GenCos.

According to her, N333 billion has so far been paid to eight participating GenCos covering 17 power plants, while the first coupon payment of about N63.5 billion on the seven-year bond was made in full on July 14, 2026.

She said the timely settlement had enabled participating generation companies to meet obligations to gas suppliers, lenders and operations and maintenance contractors, thereby improving liquidity across the electricity value chain.

“Markets do not reward promises; they reward performance. Capital follows credibility,” Verheijen said, adding that the second series would deepen market liquidity and strengthen the financial foundation required to attract long-term private investment into the power sector.

She described the programme as a development initiative designed to improve electricity reliability, support businesses and enhance Nigeria’s economic transformation.

In his address, the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said the Federal Executive Council had approved a N4 trillion Power Sector Debt Reduction Initiative after a comprehensive verification of liabilities.

He explained that the debt verification exercise reduced outstanding claims from over N4 trillion to about N3.3 trillion through line-by-line validation of services rendered.

Oyedele said the second bond issuance, valued at about N729 billion, would complete the first phase of the debt settlement programme and extend payments to more generation companies, gas suppliers and other service providers.

He noted that the successful repayment of the first bond coupon had demonstrated the government’s credibility and strengthened investor confidence.

“Investors do not reward intentions; they reward execution. Every commitment honoured today reduces the cost of capital tomorrow,” he said.

The Minister said the bond forms part of broader economic reforms aimed at strengthening public finances, improving infrastructure financing and mobilising long-term private capital for strategic sectors.

Also speaking, the Minister of Power, Mr Joseph Tegbe, said resolving the liquidity crisis in the electricity market was critical to achieving reliable power supply and sustainable economic growth.

According to him, the debt reduction programme is not merely a financing transaction but a key economic reform designed to restore the commercial viability of Nigeria’s electricity market.

He urged pension funds, insurance firms, banks and other institutional investors to support the bond programme, describing it as an opportunity to partner with the Federal Government in transforming Africa’s largest electricity market.

“Our destination is clear: a financially sustainable, investment-led electricity market that powers Nigeria’s industrial renaissance. Therefore, I encourage you to see this offering beyond a mere fixed-income instrument. It should be viewed as an opportunity to partner with the Federal Government in writing the next chapter of our economic story”, he added.

Former Acting Managing Director of NBET, Mr Johnson Akinnawo, also called on investors to participate in the second series, saying the success of the first issuance had shown that Nigerian power sector securities were credible investment instruments.

He acknowledged that while challenges remain in the electricity sector, the Federal Government remained committed to addressing them through sustained financial and structural reforms.

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