The Federal Government has raised about N1.23 trillion through two bond issuances under its power sector debt reduction programme, as it moves to settle about N4 trillion in legacy obligations owed to electricity Generation Companies (GenCos).

Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, disclosed this in Abuja on Monday, according to the News Agency of Nigeria (NAN).

He said the second series raised N728.9 billion after N501 billion was secured through Series 1 in January.

The Series 2 issuance, launched in August, attracted 11 GenCos, up from eight participants in the first transaction, with Odeyemi describing the broader participation as a sign of growing confidence in the programme.

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What they are saying

Odeyemi said the N728.9 billion raised under Series 2 would be implemented through two tranches, Tranches A and B.

He said accumulated unpaid obligations had weakened the finances of participants across the electricity market and limited GenCos’ ability to invest in additional generation capacity.

The NBET chief executive said the debt programme should therefore be viewed as more than a mechanism for clearing historical liabilities, as it is also intended to restore liquidity and financial confidence across the Nigerian Electricity Supply Industry.

  • “The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme,” Odeyemi said.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said Series 2 consisted of 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.

He said the transaction was designed to address accumulated obligations that had weakened liquidity and confidence throughout the electricity value chain.

Oyedele, however, stressed that settling the debt would not by itself resolve the sector’s financial challenges.

  • “This means that the bond programme cannot stand alone,” he said, calling for stronger market discipline, improved revenue assurance, lower technical and commercial losses, and greater accountability across the electricity ecosystem.

He added that the Federal Government was using Nigeria’s domestic capital market to address legitimate legacy obligations through a structured and transparent process.

Minister of Power Joseph Tegbe said the issuance demonstrated the Federal Government’s commitment to addressing structural weaknesses in the electricity industry.

Represented by the ministry’s Permanent Secretary, Mahmuda Mamman, Tegbe said the initiative was part of efforts to strengthen the financial position of the sector and create the conditions for more stable electricity supply.

Special Adviser to President Bola Tinubu on Oil and Gas, Olu Verheijen, said Series 1 resulted in settlement agreements with 11 GenCos covering 21 power plants.

She said Series 2 would build on that foundation by extending implementation of the debt reduction framework.

Backstory

The Federal Executive Council approved aN4 trillion Power Sector Debt Reduction Initiative after the government conducted a comprehensive verification of outstanding liabilities.

  • The verification exercise reduced outstanding claims from more than N4 trillion to about N3.3 trillion through line-by-line validation of services rendered.
  • Under the first series of the programme, N333 billion has so far been paid to eight participating GenCos covering 17 power plants.
  • The first coupon payment of about N63.5 billion on the seven-year bond was made in full on July 14, 2026.

The timely settlement enabled participating generation companies to meet obligations to gas suppliers, lenders and operations and maintenance contractors.

The government said the second bond issuance would complete the first phase of the debt settlement programme and extend payments to more participants across the electricity value chain.

In January, the Federal Government announced it recorded a full subscription for its N501 billion inaugural power sector bond issued under the Presidential Power Sector Debt Reduction Programme (PPSDRP).

What you should know

In December, Nairametrics reported that the Federal Government issued the first bond under the Presidential Power Sector Debt Reduction Programme, marking a major step toward resolving payment arrears in Nigeria’s electricity industry.

However, officials insist the approach will stabilise the power sector and support long-term economic growth.