FG to Issue N729bn bond to clear GenCos’ debt

By Obas Esiedesa, Abuja

The Federal Government is set to issue a second bond worth about N729 billion to electricity generation companies (GenCos) as part of efforts to clear verified legacy debts and improve liquidity in Nigeria’s power sector.

The planned issuance will complete the first phase of the N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Tinubu to address longstanding financial obligations in the Nigerian Electricity Supply Industry (NESI).

The second bond issuance, scheduled to follow an Investors’ Forum this week, comes after the successful issuance of a ₦501 billion Series 1 bond in January 2026.

Together, the two issuances will constitute the N1.23 trillion first phase of the debt reduction programme aimed at settling verified debts owed to GenCos and strengthening the financial sustainability of the electricity sector.

In a statement on Sunday, the Nigerian Bulk Electricity Trading Plc (NBET) said the new issuance would boost investor confidence, improve liquidity across the electricity value chain and support sustainable power generation.

NBET also disclosed that the first coupon and principal repayment on the Series 1 bond, which matured on July 14, 2026, was paid in full and on schedule, describing it as evidence of the Federal Government’s commitment to meeting its financial obligations.

The agency said the January 2026 bond issuance was part of a broader strategy to settle verified obligations to GenCos, enhance sector liquidity and strengthen the financial position of market participants.

NBET Managing Director and Chief Executive Officer, Mr Johnson Akinnawo, described the planned issuance as another milestone in efforts to restore stability to the power sector.

“The second issuance demonstrates the Federal Government’s commitment to resolving verified legacy obligations through a transparent, structured and market-based mechanism,” Akinnawo said.

He said improved liquidity in the electricity value chain would strengthen market confidence, attract investment and support increased power generation for Nigerians.

Akinnawo recalled that the Federal Executive Council approved the N4 trillion Presidential Power Sector Debt Reduction Programme in 2025, with NBET appointed as the sponsoring institution responsible for settling verified legacy debts.

He explained that the programme would be executed through multiple debt instrument issuances by NBET Finance Company Plc, a special purpose vehicle created for the initiative.

The debt instruments are backed by the full faith and credit of the Federal Government and supported by comprehensive risk mitigation measures.

According to Akinnawo, the proposed N729 billion bond represents a significant step towards resolving the power sector’s debt burden and creating a more stable, bankable and investment-friendly electricity market.

The latest move forms part of ongoing government efforts to address the liquidity challenges that have affected Nigeria’s electricity industry for years, with outstanding debts owed to GenCos identified as a major constraint to investment, generation capacity expansion and the overall viability of the power sector.

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