The Federal Government has raised N501.02 billion from the bond market to start settling outstanding debts owed to power generation companies (GenCos), as part of efforts to reduce over N6 trillion in liabilities across the electricity sector.
The funds were mobilised through two seven-year bond tranches: N300 billion Series 1 Tranche A and N201.02 billion Series 1 Tranche B, both priced at 17.50 per cent. The bonds were issued 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 under the Presidential Power Sector Debt Reduction Programme (PPSDRP).
Speaking at the signing ceremony in Lagos, Special Adviser on Energy to President Bola Tinubu, Mrs. Olu Verheijen, said the programme targets verified receivables for electricity supplied between February 2015 and March 2025. Fourteen GenCos have signed Full and Final Settlement Agreements valued at about N827 billion.
Proceeds from the Series 1 bond will fund the first and second instalments to participating GenCos, estimated at N421.42 billion roughly 50 per cent of the negotiated settlement through a mix of cash and notes.
Finance Minister Wale Edun, represented by DMO Director-General Patience Oniha, noted that legacy power sector debts had long constrained sector growth, emphasizing that their resolution is crucial for market reform. NBET Acting Managing Director, Johnson Akinnawo, described the bond issuance as a milestone that will improve liquidity in the power value chain and attract new investments.
Some of the GenCos involved include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.
