The Federal Government is set to settle more than N1.123 trillion in legacy debts owed to electricity generation companies, GenCos, following the completion of the second tranche of bonds under its Power Sector Multi-Instrument Issuance Programme.
Nigerian Bulk Electricity Trading Plc, NBET, said on Wednesday that it had concluded the issuance of the Series 2 bond, valued at N728,979,000,000, under the N4 trillion programme established to address outstanding debts in the power sector.
According to NBET, the issuer, NBET Finance Company Plc, has completed the N402,000,000,000 Series 2, Tranche A Bonds and obtained approval from the Minister of Finance for the N326,979,000,000 Series 2, Tranche B Bonds.
The company explained that the Series 2 issuance followed the launch of the seven-year, N728.9 billion Amortising Power Sector Bond in August 2026. The bond consists of N402 billion in cash bonds sold to capital market investors and N326.9 billion in non-cash bonds issued to GenCos participating in the Presidential Power Sector Debt Reduction Programme, PPSDRP.
NBET described the development as another step towards clearing legacy debts owed to power generation companies, adding that a signing ceremony to mark the Series 2 capital raise would take place on Monday, September 14, 2026, in Abuja.
The Series 2 issuance follows an earlier tranche under the same programme. The Presidency had disclosed that the inaugural Series 1 bond, valued at N501 billion, achieved a 100 per cent subscription from pension funds, banks and asset managers when it was floated.
Officials said the Series 1 bond was also divided into cash and non-cash instruments, with N300 billion raised in cash from capital market investors and N201 billion issued directly to participating GenCos as non-cash instruments.
With the latest N728.98 billion Series 2 bond, total issuance under the PPSDRP has now risen above N1.123 trillion, while remaining within the N4 trillion ceiling approved for the broader power sector debt programme.
Like the first tranche, the Series 2 bond was structured into cash and non-cash components to help address liquidity pressures in the electricity market. Tranche A, worth N402 billion, was raised through book-building from capital market investors, while Tranche B, valued at N326.98 billion, was issued through private placement to participating GenCos.
Sources monitoring the programme said funds raised through the bond issuances had been directed towards tackling liquidity and gas supply challenges affecting the Nigerian Electricity Supply Industry, NESI.
It was gathered that N333 billion had already been disbursed to eight participating GenCos covering 17 power plants from the funds raised under the programme.
The credibility of the programme was also strengthened earlier this year after the first coupon and principal payment on the Series 1 bond, valued at N63.5 billion, was made as scheduled. The payment was viewed as a boost to investor confidence ahead of the Series 2 issuance.
The N4 trillion electricity-sector debt accumulated over several years following the 2015 power-sector privatisation. GenCos supplied electricity, but payments through NBET remained insufficient because Distribution Companies, DisCos, were unable to fully remit collections and recover enough revenue from consumers.
The debt burden was further aggravated by electricity tariffs that remained below the cost of generating and supplying power. Government-funded tariff shortfalls were not consistently settled, while rising gas prices, foreign exchange pressures, technical and commercial losses and weak market remittances contributed to the sector’s liquidity crisis. Consequently, unpaid GenCo invoices and other market obligations continued to accumulate.
The Federal Government is now addressing the verified arrears through the Presidential Power Sector Debt Reduction Programme. Under the N4 trillion bond programme, the government is converting the debts into cash and non-cash bonds, allowing participating GenCos to receive payment over time instead of relying on an immediate budgetary settlement.
Source: Nigerian Bulk Electricity Trading Plc (NBET)
