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FG, through NBET, issues N501bn bonds under PPSDRP to begin settling GenCos’ arrears
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14 GenCos sign settlement agreements valued at N827bn, with first payments covering 50%
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Move aims to improve liquidity, reset the electricity market, and attract new investments
The Federal Government has raised N501.02 billion from the bond market to commence the settlement of outstanding debts owed to electricity Generation Companies (GenCos), as part of efforts to address over N6 trillion liabilities in Nigeria’s power sector.
The funds were raised through the issuance of two seven-year bond tranches—a N300 billion Series 1 Tranche A bond and a N201.02 billion Series 1 Tranche B bond, both priced at 17.50 per cent.
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The bonds were issued by NBET Finance Company Plc, a special purpose vehicle of the Nigerian Bulk Electricity Trading Plc (NBET), and are fully guaranteed by the Federal Government under the Presidential Power Sector Debt Reduction Programme (PPSDRP).
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Speaking at the signing ceremony in Lagos, the Special Adviser on Energy to President Bola Ahmed Tinubu, Mrs Olu Verheijen, said the programme was designed to clear long-standing payment arrears and stabilise the electricity market.
According to her, verified receivables for power supplied between February 2015 and March 2025 are being settled through negotiated agreements with GenCos.
Verheijen disclosed that 14 generation companies have signed Full and Final Settlement Agreements with a total negotiated value of about N827 billion.
She explained that proceeds from the bond issuance would fund first and second instalment payments to participating GenCos, estimated at N421.42 billion, representing about 50 per cent of the settlement value, with payments made through a mix of cash and notes.
Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, represented by DMO Director-General, Ms Patience Oniha, said unresolved legacy debts had constrained growth in the power sector for years, stressing that clearing them was critical to reform.
Meanwhile, NBET Acting Managing Director, Mr Johnson Akinnawo, described the bond issuance as a major milestone that would improve liquidity across the power value chain and support fresh investments.
GenCos that have signed the settlement agreements include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.
