FG Raises N1.23tn in Fresh Push to Clear Verified GenCo Debt 

• The Federal Government has raised N1.23tn through two bond issuances under its power sector debt reduction programme, including N728.9bn in the second series.

• The government’s verification exercise reduced outstanding claims from more than N4tn to about N3.3tn.

• Officials say debt settlement must be accompanied by stronger market discipline, improved revenue collection and lower technical and commercial losses to restore the electricity sector’s financial health.

September 15, () – The Federal Government has raised N1.23tn through two bond issuances under its Presidential Power Sector Debt Reduction Programme as it moves to settle verified legacy obligations owed to electricity Generation Companies (GenCos).

The Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, disclosed this in Abuja, saying N501bn was raised through the inaugural series in January, while the second series raised N728.9bn.

The Series 2 issuance, launched in August, attracted 11 GenCos, compared with eight participants in the first transaction.

Odeyemi said the increased participation reflected growing confidence in the debt reduction programme, adding that the N728.9bn raised under Series 2 would be implemented through two tranches.

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

According to him, the programme is therefore intended not only to clear historical liabilities but also to restore liquidity and confidence across the Nigerian Electricity Supply Industry.

Government says debt alone is not the solution

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the second series comprised N402bn in cash bonds and N326.9bn in non-cash bonds allocated to participating GenCos.

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

Oyedele, however, said settling the debt would not by itself resolve the sector’s financial problems.

“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 said the Federal Government was using the domestic capital market to address legitimate legacy obligations through a structured and transparent process.

Minister of Power Joseph Tegbe, represented by Permanent Secretary Mahmuda Mamman, said the issuance demonstrated the government’s commitment to addressing structural weaknesses in the electricity industry.

He said strengthening the sector’s financial position would help create conditions for more stable electricity supply.

N333bn already paid to GenCos

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, while the second series would extend the debt reduction framework.

The Federal Executive Council approved the N4tn Power Sector Debt Reduction Initiative after the government conducted a comprehensive verification of outstanding liabilities.

The exercise reduced claims from more than N4tn to about N3.3tn through line-by-line validation of services rendered.

Under the first series, N333bn has so far been paid to eight GenCos covering 17 power plants. The government also made the first coupon payment of about N63.5bn on the seven-year bond in full on July 14, 2026.

The government said the timely settlement enabled participating GenCos to meet obligations to gas suppliers, lenders and operations and maintenance contractors.

The second issuance is expected to extend payments to more participants across the electricity value chain, although officials maintain that sustainable sector financing will ultimately depend on stronger revenue collection and improved operational efficiency.