—14 GenCos sign deal
—It’s a game changer, NBET

By Obas Esiedesa, Abuja

The Federal Government on Tuesday said it is set to pay power generation companies (GenCos) N501.02 billion following a successful bond issuance aimed at reducing the over N6 trillion debt owed to the power sector.

The funds were raised through the issuance of two bond tranches: a N300 billion 7-year 17.50 per cent Series 1 (Tranche A) bond and a N201.02 billion 7-year 17.50 per cent Series 1 (Tranche B) bond.

The bonds were issued by NBET Finance Company Plc, a special purpose vehicle established by the Nigerian Bulk Electricity Trading Plc (NBET) specifically for the transaction. The issuance is fully guaranteed by the Federal Government under the Presidential Power Sector Debt Reduction Programme (PPSDRP).

Speaking at an agreement signing ceremony in Lagos, the Special Adviser on Energy to President Bola Tinubu, Mrs Olu Verheijen said the programme, championed by the President, is designed to address long-standing payment arrears owed to power generation companies.

Verheijen stated that the programme represents a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.

She explained that under the programme, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with power generation companies.

“Today’s signing marks the outcome of that process. Fourteen generation companies have executed Full and Final Settlement Agreements, with a total negotiated value of approximately N827 billion. These agreements reflect discipline, compromise, and a shared commitment to closing the chapter on legacy arrears.

“The significance of this milestone lies not only in clearing the past, but in what it unlocks going forward. Resolving these liabilities restores liquidity across the value chain, strengthens payment certainty for gas suppliers, and creates the financial headroom required for operators to stabilise assets, improve availability, and plan new investment”.

She disclosed that the proceeds from Series 1 issuance will fund the first and second installment payments to participating power generation companies with signed Settlement Agreements, estimated at N421.42 billion, representing approximately 50% of the total negotiated settlement amount.

“The payment for this initial phase will be made through a mix of cash and notes”, she added.

Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun acknowledged that the legacy debts owed by the Federal Government have constrained growth of the power sector for many years.

Represented by the Director General, Debt Management Office (DMO), Ms Patience Oniha, Mr Edun noted that resolving the debt issue was not optional but a critical step to grow the sector.

“By settling legacy debts in a structured manner, we are enabling Generation Companies to stabilise operations, improve maintenance, and attract new investment — all of which are critical to improving power supply nationwide”, he added.

Speaking earlier, the Acting Managing Director of NBET, Mr. Johnson Akinnawo pointed out that the successful completion of the first tranche marked a milestone in the implementation of the programme.

“The successful close of the N501 billion bond represents a major step forward in resolving the longstanding challenge that has constrained the power sector for years. This intervention will significantly improve liquidity across the value chain, enable operators to stabilize their operations and support renewed investment in the Nigerian power sector”, he stated.

The generation companies which signed the deal with the government include First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited (NDPHC).

Speaking at the event, Group Managing Director of Sahara Power Group, which owns five power plants, Kola Adesina said capital formation “can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made. Because we were being owed so much, it was a bit of a problem for us to put in more money.

“But last year we took the bull by the horns, based on President Bola Ahmed Tinubu’s commitment in resolving the legacy issues, and I can say that once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant. On behalf of the Generation Companies, I’d like to thank the President for this resolution.”