The Federal Government has paid N333bn to eight electricity generation companies as part of the ongoing FG GenCos debt payment efforts. It has also settled the first coupon under its power sector debt financing programme. Notably, the FG GenCos debt payment represents a major milestone in financial settlements within the power sector.
According to The Punch, the payments cover 17 power plants participating in the first phase of the programme. This phase is designed to address long-standing debts in Nigeria’s electricity market.
The government said it deployed about N501bn under the first issuance. This consisted of N300bn in cash and N201bn in non-cash bond instruments. The FG GenCos debt payment process was carefully structured to include a mix of cash and bond instruments to handle these obligations.
It also announced plans to raise another N729bn through a second bond issuance. The aim is to continue settling verified obligations and improve liquidity across the electricity value chain.
Presidential energy adviser Olu Verheijen disclosed the figures on Tuesday. This was during the Nigerian Bulk Electricity Trading Finance Company Plc Series II Bond Investors’ Forum in Abuja.
N333bn paid to eight GenCos
Verheijen said the government had settled N333bn owed to eight participating generation companies operating 17 power plants.
“To date, N333bn has been settled to eight participating generation companies, covering 17 power plants, and they have executed those participation agreements,” she said.
She explained that the N501bn deployed in February addressed approximately 22 per cent of the obligations. These were covered by executed settlement agreements. This illustrates the significant scale of the FG GenCos debt payment procedure currently underway.
“Series I delivered on its promise. In February 2026, the Federal Government deployed approximately N501bn — N300bn in cash and N201bn through non-cash bond instruments — addressing approximately 22 per cent of the settlement obligations under executed settlement agreements,” Verheijen said.
She added that the government would settle the remaining obligations through the proposed Series II bond and subsequent issuances.
The programme seeks to clear debts accumulated from unpaid electricity invoices. These have affected the ability of GenCos to pay gas suppliers, service loans and maintain power plants. As a result, the FG GenCos debt payment initiative is critical for restoring operational stability in the sector.
Government settles first coupon
Verheijen also announced that the government paid the first coupon on the Series I bond in full on July 14.
“We have met our obligations on schedule. Thank you to the Director-General of the Debt Management Office. The first Series I coupon, about N63.5bn, was paid in full on July 14, 2026,” she said.
According to her, the timely payment demonstrated the government’s commitment to honouring its obligations. As a result, it is rebuilding confidence in Nigeria’s power market.
“Markets do not reward promises. They reward performance. And that is why we deliberately chose execution before expansion,” she said.
Verheijen said the Tinubu administration chose to meet its obligations under the first issuance before approaching investors for additional funding.
She argued that the government was converting old liabilities into liquidity. This liquidity could support investment and improve operations across the electricity industry.
“We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity,” she said.
“That liquidity, if sustained, will strengthen the entire electricity value chain, improve operational performance and restore confidence across the sector.”
FG plans N729bn second bond
The presidential adviser said the success of the first issuance had created a foundation for the proposed N729bn Series II bond.
According to her, the new issuance will extend the settlement of verified debts. Furthermore, this will provide more liquidity to electricity generation companies and other participants in the power value chain.
“Series I has proved the model and Series II is going to scale it,” she said.
“This issuance extends the settlement of verified legacy obligations and deepens liquidity through the electricity value chain.”
She urged investors to view the bond as support for a wider reform programme. This programme aims at restoring payment discipline and attracting private capital into Nigeria’s electricity industry.
“By participating, you are not simply purchasing a financial instrument. You are investing in a reform programme that is designed to restore payment discipline, strengthen cash flows, crowd in private capital and accelerate Nigeria’s economic transformation,” she said.
GenCos meeting financial obligations
Verheijen said the impact of the payments was already becoming visible across the power industry.
She stated that participating GenCos had resumed payments to gas suppliers, lenders and operations and maintenance contractors.
“Participating generation companies are now meeting their gas obligations. Lenders and operation and maintenance contracts that had previously gone unmet are now being met,” she said.
She added that the strong participation recorded during the first issuance reflected growing confidence in the government’s power sector reforms.
The Federal Government launched the Presidential Power Sector Financial Reforms Programme to address unpaid obligations and improve the financial sustainability of the electricity market.
Years of unpaid invoices have weakened GenCos and limited their ability to invest in equipment, maintenance and additional generation capacity.
NBET says power debt instruments are bankable
Acting Managing Director of the Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, said the success of the first issuance demonstrated that investors were willing to support properly structured power sector debt instruments.
“When we came to the market with Series I, we did not present it as a routine capital raise,” Akinnawo said.
“We presented it as a test of a proposition: that Nigerian legacy power sector debt could be resolved through disciplined, transparent capital market instruments rather than endless promises.”
He said the government met its repayment obligations when they became due on July 14.
“You answered that call. The N501bn answered that call. And we met the promises,” he said.
Akinnawo added that improved liquidity was already evident across the electricity value chain.
“The evidence of your trust is visible today in improved liquidity across the value chain. Nigerian power sector paper has proven that it is bankable,” he said.
He disclosed that the proposed N729bn issuance would continue the settlement of verified debts and further stabilise the electricity market.
The government said both issuances would strengthen the financial foundation of the sector. In addition, they will support efforts to provide more reliable and affordable electricity to households and businesses, and the FG GenCos debt payment strategy remains central to this goal.
