Second issuance attracts N728.9bn as government moves to settle about N4tn in legacy obligations….
The Federal Government has raised a combined N1.23 trillion through two bond issuances under its Presidential Power Sector Debt Reduction Programme, as it steps up efforts to clear billions of naira in outstanding obligations owed to electricity generation companies.
Chief Executive Officer of Nigerian Bulk Electricity Trading Plc, NBET, Akin Odeyemi, disclosed this in Abuja on Monday, saying the latest transaction brought the total amount raised under the programme to N1.23 trillion.
According to Odeyemi, the second series raised N728.9 billion, following the N501 billion secured through the inaugural issuance in January.
Launched in August, the second series attracted 11 GenCos, compared with eight that participated in the first transaction.
Odeyemi described the broader participation as an indication of increasing confidence in the government’s debt settlement framework.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme,” he said.
The N728.9 billion raised through Series 2 will be deployed in two tranches, identified as Tranches A and B.
Odeyemi said the accumulation of unpaid obligations over the years had weakened the financial position of companies across the electricity market, limiting the capacity of GenCos to invest in additional generation.
He stressed that the bond programme was therefore designed to achieve more than simply clear historical debts, arguing that it would also help restore liquidity and rebuild confidence across the Nigerian Electricity Supply Industry.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the second issuance comprised N402 billion in cash bonds and N326.9 billion in non-cash bonds allocated to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
Oyedele said the transaction was structured to address accumulated liabilities that have strained liquidity across the electricity value chain and weakened confidence in the market.
The minister, however, cautioned that clearing the outstanding debts would not by itself fix the sector’s deeper financial problems.
“This means that the bond programme cannot stand alone,” Oyedele said, stressing the need for stronger market discipline, improved revenue collection, reduced technical and commercial losses, as well as greater accountability among operators.
He said the Federal Government was using the domestic capital market to resolve verified legacy obligations through what he described as a structured and transparent process.
Minister of Power, Joseph Tegbe, said the latest issuance reflects the government’s determination to address longstanding structural problems in the electricity industry.
Tegbe, who was represented by the ministry’s Permanent Secretary, Mahmuda Mamman, said the initiative would strengthen the financial position of the sector and help create conditions for more reliable electricity supply.
Also speaking, Special Adviser to President Bola Tinubu on Oil and Gas, Olu Verheijen, said the first series resulted in settlement agreements with 11 GenCos covering 21 power plants.
She said the second series would build on that foundation by expanding the implementation of the debt reduction framework.
The Federal Executive Council had earlier approved a N4 trillion power sector debt reduction initiative following a comprehensive verification of outstanding claims.
The exercise reduced the government’s verified liabilities from more than N4 trillion to about N3.3 trillion after claims were subjected to line-by-line validation against services rendered.
Under the first series, N333 billion has so far been paid to eight participating GenCos covering 17 power plants.
The government also made the first coupon payment of about N63.5 billion on the seven-year bond in full on July 14, 2026.
The payment enabled participating generation companies to meet outstanding obligations to gas suppliers, lenders and operations and maintenance contractors.
The government says the second issuance is expected to complete the first phase of its debt settlement plan while bringing more participants across the electricity value chain into the process.
In January, the Federal Government announced that its inaugural N501 billion power sector bond had been fully subscribed, marking an early milestone in the implementation of the Presidential Power Sector Debt Reduction Programme.
The initiative followed the government’s decision to use government-backed bonds to address legacy debts owed to GenCos and gas suppliers, with the overall programme expected to raise up to N4 trillion.
The plan has, however, attracted concerns in some quarters over the possibility of creating a debt-for-debt cycle.
Government officials maintain that the structured settlement is necessary to restore financial stability in the power sector, improve investor confidence and create a stronger foundation for sustained investment and more reliable electricity generation.
