The Federal Government has begun settling outstanding debts owed to electricity generation companies and their gas suppliers through a N728.98bn bond issuance, in a move aimed at easing liquidity constraints in the power sector.
The Nigerian Bulk Electricity Trading (NBET) Plc disclosed this in a statement by its Managing Director and Chief Executive Officer, Akin Odeyemi, following the successful issuance and signing of the Series 2 bonds under the N4tn Power Sector Multi-Instrument Issuance Programme.
The settlement forms part of President Bola Tinubu’s Power Sector Debt Reduction Programme, designed to address longstanding financial obligations across the electricity value chain.
According to NBET, the N728.979bn settlement comprises N402bn in cash bonds and N326.979bn in non-cash bonds.
The company said the ongoing payments represented a significant step towards resolving historical debts and improving the financial position of electricity generation companies and their associated gas suppliers.
The programme is also expected to improve cash flow across the electricity market, strengthen payment discipline and provide greater certainty for investors.
NBET said, “The ongoing settlement marks a major step towards addressing historical obligations, restoring liquidity across the electricity value chain, and strengthening the financial position of power sector participants.”
The company added that a more financially stable generation segment would improve operators’ capacity to maintain their facilities, support electricity generation and contribute to more reliable power supply.
It said the initiative was intended to help the electricity market move towards a sustainable financial framework that could attract continued investment across the sector.
Beyond settling legacy obligations, NBET said the programme would lay the foundation for a commercially viable electricity market by improving liquidity and strengthening confidence among industry participants.
The company disclosed that it was already making preparations for the second phase of the programme under the N4tn issuance framework.
The latest development follows years of accumulated debts and liquidity challenges in Nigeria’s electricity industry, which have placed pressure on generation companies and gas suppliers.
However, the bond settlement alone does not guarantee improved electricity supply, as sustained progress will also depend on payment discipline, market reforms and the ability of operators to maintain and expand generation capacity.
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