The Federal Government has paid N333 billion to electricity generation companies and launched a N729 billion bond to reduce power sector debt and improve electricity market liquidity.
The Federal Government has disbursed approximately N333 billion to eight electricity generation companies (GenCos) under its ongoing power sector debt settlement programme and unveiled a second bond worth N729 billion to clear additional legacy liabilities in the Nigerian Electricity Supply Industry (NESI).
The announcement was made during an investors’ forum organised by the Nigerian Bulk Electricity Trading (NBET) Plc in Abuja, where government officials outlined plans to complete the first phase of the Presidential Power Sector Debt Reduction Programme.
The initiative is designed to settle verified outstanding obligations, restore financial stability across the electricity value chain and encourage fresh investment in Nigeria’s power sector.
Special Adviser to the President on Oil and Gas, Mrs Olu Verheijen, said the first phase of the programme demonstrated the Federal Government’s commitment to meeting its financial obligations and rebuilding investor confidence.
She disclosed that the government released about N501 billion in February 2026 under the first series of the programme, consisting of N300 billion in cash and N201 billion in bond instruments to offset part of the verified debts owed to electricity generation companies.
According to her, N333 billion has already been paid to eight participating GenCos operating 17 power plants. She also confirmed that the government successfully made the first coupon payment of approximately N63.5 billion on the seven-year bond on July 14, 2026.
Verheijen explained that the payments have enabled participating generation companies to meet financial commitments to gas suppliers, lenders and operations and maintenance contractors, thereby improving liquidity within the electricity market.
“Markets do not reward promises; they reward performance. Capital follows credibility,” she said.
She added that the newly introduced N729 billion bond would further strengthen market liquidity while creating a stronger financial foundation capable of attracting long-term private investment into the sector.
Speaking at the forum, the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, revealed that the Federal Executive Council approved a N4 trillion Power Sector Debt Reduction Initiative following a comprehensive review of liabilities across the electricity industry. He explained that the verification exercise reduced outstanding claims from over N4 trillion to approximately N3.3 trillion after validating individual debt submissions.
Oyedele said the second bond issuance would complete the first phase of the debt settlement programme while extending payments to more electricity generation companies, gas suppliers and other service providers. According to him, the successful payment of the first bond coupon has reinforced investor confidence in the government’s commitment to honouring its financial obligations.
“Investors do not reward intentions; they reward execution. Every commitment honoured today reduces the cost of capital tomorrow,” he stated.
Minister of Power, Mr Joseph Tegbe, described the debt reduction programme as a critical reform aimed at restoring the commercial viability of Nigeria’s electricity market and improving power supply across the country.
He encouraged pension fund administrators, insurance companies, banks and other institutional investors to participate in the bond programme, describing it as an opportunity to support the transformation of Africa’s largest electricity market.
“Our destination is clear: a financially sustainable, investment-led electricity market that powers Nigeria’s industrial renaissance,” Tegbe said.
Also addressing investors, former Acting Managing Director of NBET, Mr Johnson Akinnawo, urged market participants to support the second bond issuance, noting that the success of the first series had strengthened confidence in Nigerian power sector securities.
Government officials maintained that while challenges remain within the electricity industry, sustained financial reforms and strategic investments would continue to improve liquidity, enhance electricity generation and position the sector for long-term growth.
