FG Settles ₦333bn Gencos Debt, Pays First Bond Coupon As Power Sector Confidence Rebounds

FG Settles ₦333bn Gencos Debt, Pays First Bond Coupon As Power Sector Confidence Rebounds

By David E. Monday 

The Federal Government has taken a significant step toward stabilising Nigeria’s electricity sector after announcing the settlement of ₦333 billion owed to electricity Generation Companies (GenCos) and the successful payment of the first coupon under its power sector bond programme.

The development, disclosed on Tuesday at the Nigerian Bulk Electricity Trading (NBET) Finance Company Plc Series II Bond Investors’ Forum in Abuja, signals renewed efforts by the Tinubu administration to address long standing liquidity challenges that have plagued the nation’s power industry.

According to the Special Adviser to the President on Energy, Olu Verheijen, approximately ₦501 billion was deployed under the first phase of the Power Sector Debt Settlement Programme, comprising ₦300 billion in cash and ₦201 billion in non-cash bond instruments. Of this amount, ₦333 billion has already been paid to eight participating GenCos operating 17 power plants across the country.

The Federal Government also confirmed that the first Series I bond coupon, valued at about ₦63.5 billion, was paid in full on July 14, 2026, demonstrating its commitment to honouring financial obligations and strengthening investor confidence in the Nigerian Electricity Supply Industry (NESI).

Verheijen stated that the administration deliberately prioritised execution over promises, stressing that investor confidence is built on credibility and consistent performance rather than policy declarations.

She noted that the intervention is already improving liquidity across the power value chain, enabling generation companies to meet gas supply commitments, service operational obligations, and enhance power generation capacity.

As part of the next phase of the reform programme, the government plans to raise an additional ₦729 billion through a Series II bond issuance.

The proposed bond is expected to deepen liquidity, support further debt settlements, and accelerate investments needed to strengthen electricity generation and distribution nationwide.

Media Today Nigeria’s review of available official statements and independent reports confirms that
The Federal Government has indeed settled ₦333 billion to participating GenCos under the first phase of the debt reduction programme.

The first Series I bond coupon of approximately ₦63.5 billion was paid on schedule on July 14, 2026.

The government is preparing a second bond issuance worth about ₦729 billion to continue the settlement of verified legacy debts in the power sector.

The debt settlement programme forms part of a broader ₦4 trillion Presidential Power Sector Debt Reduction Programme aimed at restoring financial stability to Nigeria’s electricity market.

MEDIA TODAY NIGERIA ANALYSIS

The payment represents one of the most substantial interventions in Nigeria’s power sector since privatisation.

Analysts believe sustained settlement of legacy debts could improve power generation, attract fresh private sector investment, reduce operational bottlenecks, and strengthen confidence among domestic and international investors.

However, industry stakeholders maintain that long term success will depend on continued financial discipline, transparent implementation, market reforms, and improved revenue collection throughout the electricity value chain.

For millions of Nigerians grappling with unreliable electricity supply, the true measure of success will ultimately be reflected in improved power availability, stronger grid performance, and reduced dependence on alternative energy sources.

ENDS