FG Injects ₦501bn Into Power Sector, Clears ₦333bn GenCo Debt, Floats ₦729bn Bond

• Federal Government deploys ₦501bn to begin clearing power sector legacy debts, settling ₦333bn owed to eight GenCos operating 17 power plants.

• Tinubu administration pays first Series I bond coupon of ₦63.5bn on schedule, describing the move as proof of renewed fiscal discipline.

• Government launches fresh ₦729bn Series II bond to clear more verified legacy debts and restore liquidity across the electricity value chain.

• Presidency says intervention is already enabling GenCos to meet gas supply obligations, service loans and restore investor confidence.

July 21, () — The Federal Government has intensified efforts to stabilise Nigeria’s troubled electricity industry, announcing the successful execution of the first phase of its power sector debt financing programme after deploying ₦501 billion to settle part of the long-standing legacy debts owed to electricity generation companies (GenCos).

The government disclosed on Tuesday that ₦333 billion has already been disbursed to eight participating GenCos operating 17 power plants, while unveiling plans to raise an additional ₦729 billion through a second bond issuance to sustain the debt settlement programme and improve liquidity across the Nigerian Electricity Supply Industry (NESI).

The announcement was made by the Special Adviser to President Bola Tinubu on Energy, Mrs Olu Verheijen, during the Nigerian Bulk Electricity Trading (NBET) Finance Company Plc Series II Bond Issue Investors’ Forum in Abuja.

The latest intervention comes as the Federal Government battles to resolve the multi-trillion-naira liquidity crisis that has crippled Nigeria’s electricity market for years, leaving generation companies burdened by unpaid invoices, mounting debts to gas suppliers, constrained maintenance budgets and declining operational capacity.

Addressing investors at the forum, Verheijen said the Tinubu administration deliberately chose to fulfil all obligations under the maiden bond issuance before returning to the capital market, insisting that credibility remains central to the government’s electricity sector reform agenda.

She said successive liquidity challenges had weakened investor confidence in the power sector, making it imperative for the government to demonstrate fiscal discipline through prompt debt servicing.

“Every successful capital market tells the same story. Investors return where governments keep their promises. President Bola Tinubu’s administration has demonstrated, beyond doubt, its commitment to making a clean break from the fiscal dysfunction that once defined Nigeria’s power sector”, she said.

According to her, the administration is not merely restructuring debts but converting long-standing liabilities into fresh liquidity capable of supporting investments across the electricity value chain.

“We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity. That liquidity, if sustained, will strengthen the entire electricity value chain, improve operational performance and restore confidence across the sector”, she added.

₦333bn Paid to Eight GenCos

Verheijen disclosed that the Federal Government injected approximately ₦501 billion into the first phase of the settlement programme in February 2026, comprising ₦300 billion in cash and ₦201 billion in non-cash bond instruments.

According to her, the intervention covered about 22 percent of obligations captured under executed settlement agreements.

She said ₦333 billion has already been paid to eight participating generation companies operating 17 power plants, with the outstanding balance to be addressed through Series II and subsequent issuances.

She further announced that the Federal Government honoured the first Series I coupon payment of approximately ₦63.5 billion on July 14, 2026, in line with the repayment schedule.

“Markets do not reward promises; they reward performance. That is why we deliberately chose execution before expansion”, Verheijen said.

She argued that prompt settlement of the coupon had reinforced investor confidence in Nigeria’s commitment to reforming its electricity market.

FG Floats ₦729bn Series II Bond

Building on the success of the maiden issuance, the Federal Government is now seeking to raise approximately ₦729 billion under Series II of the Power Sector Multi-Instrument Issuance Programme.

Verheijen explained that the fresh capital would be used to settle additional verified legacy debts while improving liquidity throughout the electricity value chain.

She urged investors to view the bond as more than a financial asset, describing it as an investment in Nigeria’s economic recovery and electricity sector reforms.

“By participating, you are not simply purchasing a financial instrument. You are investing in a reform programme designed to restore payment discipline, strengthen cash flows, crowd in private capital and accelerate Nigeria’s economic transformation”, she said.

She noted that stable electricity remains critical to economic growth, industrial competitiveness and improved living standards.

NBET Hails Market Response

Also speaking, the Acting Managing Director and Chief Executive Officer of the Nigerian Bulk Electricity Trading (NBET) Plc, Johnson Akinnawo, described the success of the maiden issuance as a major vote of confidence in Nigeria’s power sector reforms.

He recalled that when Series I was introduced, the objective was to determine whether legacy debts that had accumulated over several years could be resolved through transparent capital market instruments rather than repeated government assurances.

“When we came to the market with Series I, we did not present it as a routine capital raise. We presented it as a test of whether Nigerian legacy power sector debt could be resolved through disciplined, transparent capital market instruments rather than endless promises”, he said.

Akinnawo commended investors for supporting the initiative, noting that the Federal Government fulfilled all obligations relating to coupon and principal repayments when they fell due on July 14.

He said improved liquidity was already evident across the electricity value chain, with participating generation companies now better positioned to meet obligations to gas suppliers, lenders and operations and maintenance contractors.

Power Sector Recovery Gains Momentum

The Power Sector Multi-Instrument Issuance Programme was established under the Presidential Power Sector Financial Reforms Programme to tackle the mounting legacy debts that have constrained Nigeria’s electricity market for years.

The accumulated liabilities have left many electricity generation companies unable to pay for gas, service commercial loans or undertake critical maintenance, contributing to persistent power shortages across the country.

Government officials believe the successful execution of the ₦501 billion Series I programme and the proposed ₦729 billion Series II bond will deepen market liquidity, improve the bankability of the power sector and attract long-term private investment.

However, industry stakeholders maintain that beyond debt settlement, sustained market reforms, cost-reflective tariffs, improved revenue collection and stronger financial discipline will be essential to securing a stable and financially viable electricity industry capable of delivering reliable power to homes and businesses nationwide.