Nigeria Raises N729bn Bond as GenCo Debt Settlement Enters Second Phase

The Federal Government of Nigeria has moved to raise about N729 billion through a second bond issuance to settle verified debts owed to electricity generation companies (GenCos), part of a wider push to restore financial stability to Nigeria's power sector.

The Nigerian Bulk Electricity Trading Plc (NBET) disclosed the new issuance at an Investors' Forum held in Abuja on Tuesday, 21 July. It brings the value of the first two bond issuances under the Presidential Power Sector Debt Reduction Programme to about N1.23 trillion, following an initial N501 billion raised in January 2026.

Both issuances complete the first phase of the government's N4 trillion debt reduction programme, approved by President Bola Tinubu to clear long-standing payment obligations across the electricity value chain.

Payments already reaching GenCos

Speaking at the forum, Special Adviser to the President on Oil and Gas Olu Verheijen said about N333 billion has already been paid to eight participating GenCos covering 17 power plants. She said the N501 billion raised under the first series comprised N300 billion in cash and N201 billion in non-cash bond instruments, deployed in February 2026.

The first coupon payment on the seven-year Series 1 bond, worth about N63.5 billion, was paid in full on 14 July 2026, on schedule.

Verheijen said the timely settlement has allowed participating GenCos to meet obligations to gas suppliers, lenders and operations and maintenance contractors, improving liquidity across the value chain.

"Markets do not reward promises, they reward performance," she said.

Minister of Power Joseph Tegbe, delivering keynote remarks at the forum, described the bond issuance as a step in turning long-standing fiscal distortions in the Nigerian Electricity Supply Industry (NESI) into bankable opportunities, and urged investors to deepen their exposure to the power sector.

A structural fix for years of unpaid invoices

Years of unpaid invoices have weakened the financial position of GenCos, many of which have struggled to maintain generation capacity because they are not paid in full for the electricity they supply to the national grid.

The debt problem stems from revenue shortfalls across the value chain, where distribution companies often fail to recover enough from customers to fully pay for the power supplied to them, a gap that eventually reaches generating companies, gas suppliers and transmission operations.

NBET Managing Director Johnson Akinnawo said the programme is being implemented through multiple debt issuances by NBET Finance Company Plc, a special purpose vehicle created to manage the debt settlement process. He said the bonds carry the full faith and credit of the Federal Government and are backed by risk-mitigation measures designed to reassure investors.

"Raising capital is the easier part, stewarding it with integrity is the harder and ongoing work, and we do not take it lightly," Akinnawo said.