FG Launches N729bn Bond for Power Sector Debts

The Federal Government has launched a N729 billion bond to clear more outstanding debts in Nigeria’s electricity sector after paying about N333 billion to eight electricity generation companies (GenCos) under its power sector debt settlement programme. The announcement was made on Tuesday during an investors’ forum organised by Nigerian Bulk Electricity Trading (NBET) Plc in Abuja.

Government officials said the new bond will complete the first phase of the Power Sector Debt Reduction Programme, which aims to settle verified legacy debts, improve liquidity and encourage fresh investment in the Nigerian Electricity Supply Industry (NESI).

Special Adviser to the President on Oil and Gas, Mrs Olu Verheijen, said the government released about N501 billion in February 2026 under the first phase of the programme. This included N300 billion in cash and N201 billion in non-cash bond instruments. She revealed that N333 billion has already been paid to eight participating GenCos covering 17 power plants, while the first coupon payment of about N63.5 billion on the seven-year bond was made on 14 July 2026.

Verheijen said the payments have helped electricity producers meet commitments to gas suppliers, lenders and maintenance contractors, strengthening confidence in the sector. “Markets do not reward promises; they reward performance. Capital follows credibility,” she said.

Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, disclosed that the Federal Executive Council approved a N4 trillion Power Sector Debt Reduction Initiative after verifying outstanding liabilities. He explained that the review reduced verified claims from more than N4 trillion to about N3.3 trillion.

Meanwhile, Minister of Power Mr Joseph Tegbe described the Power Sector Debt Reduction Programme as a major economic reform that will restore financial stability and support reliable electricity supply. He encouraged pension funds, banks and other institutional investors to back the bond, saying it offers an opportunity to support Nigeria’s growing power market.

Do you think clearing legacy debts will help attract more private investment into Nigeria’s electricity sector?