Federal Government Settles ₦333bn GenCos Debt, Pays First Bond Coupon Under Power Sector Reform

The Federal Government has taken another major step toward restoring confidence in Nigeria’s electricity sector by settling ₦333 billion of long-standing debts owed to electricity generation companies (GenCos) and successfully paying the first coupon on its power sector reform bond.

The development forms part of the first phase of the government’s Power Sector Multi-Instrument Issuance Programme, an initiative designed to resolve legacy debts, improve liquidity across the electricity value chain, and attract fresh private investment into the industry.

Speaking at the Nigerian Bulk Electricity Trading (NBET) Finance Company Plc Series II Bond Issue Investors’ Forum in Abuja, the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, revealed that the government had fully met all obligations under the first bond issuance, reinforcing its commitment to financial discipline and market reforms.

According to Verheijen, the Federal Government injected approximately ₦501 billion into the programme in February 2026. The funding consisted of ₦300 billion in cash and ₦201 billion through non-cash bond instruments, covering about 22 percent of verified settlement obligations under executed agreements.

She disclosed that ₦333 billion has already been paid to eight participating electricity generation companies operating 17 power plants across the country. The intervention has helped improve cash flow for power producers, enabling them to meet gas supply commitments, service existing loans, and fund operations and maintenance activities.

The government also fulfilled its first debt servicing obligation by paying approximately ₦63.5 billion as the first coupon on the Series I bond on July 14, 2026. Verheijen described the timely payment as a clear demonstration of the administration’s determination to rebuild investor confidence through consistent execution rather than promises.

She noted that the Tinubu administration is focused on transforming legacy liabilities into sustainable investment opportunities capable of strengthening Nigeria’s electricity market. According to her, credibility remains the foundation for attracting long-term private capital into the sector.

Building on the success of the first issuance, the Federal Government is now preparing to launch a ₦729 billion Series II bond, which will further settle verified legacy debts while improving liquidity throughout the power value chain.

Verheijen explained that the second phase of the programme will deepen financial stability in the electricity sector, creating a stronger foundation for future investments, improved operational performance, and a more reliable power supply for homes and businesses.

She emphasized that the reform programme extends beyond financial restructuring, describing reliable electricity as a critical driver of economic growth, business expansion, industrial productivity, and improved living standards for Nigerians.

Also speaking at the forum, Acting Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, said the successful execution of Series I proved that Nigeria’s power sector debt instruments can attract investor confidence when backed by transparency and government commitment.

He recalled that the initial ₦501 billion issuance was introduced as a test of whether long-standing debts in the electricity sector could be resolved through structured capital market instruments rather than repeated promises.

According to Akinnawo, the government fulfilled both coupon and principal repayment obligations on schedule, demonstrating that Nigeria’s power sector investment instruments are becoming increasingly bankable.

The Power Sector Multi-Instrument Issuance Programme was established under the Presidential Power Sector Financial Reforms Programme to address years of unpaid invoices that have weakened electricity generation companies and disrupted the financial stability of the industry.

With the successful settlement of part of the outstanding debts and the upcoming ₦729 billion bond issuance, the Federal Government aims to strengthen the financial health of the electricity sector, encourage greater private sector participation, and accelerate Nigeria’s journey toward a more reliable and sustainable power supply.