FG raises N729bn bond to clear GenCos’ legacy debts

FG raises N729bn bond to clear GenCos’ legacy debts

The Federal Government is set to issue a second bond worth about N729bn to settle verified legacy debts owed to electricity generation companies, in a move aimed at restoring liquidity to Nigeria’s power sector and improving investor confidence.

The planned issuance, which will be preceded by an Investors’ Forum scheduled for Tuesday, July

21,  2026,  will  complete  the  first  phase  of  the  Presidential  Power  Sector  Debt  Reduction

Programme, bringing the total value of the first two bond issuances to about N1.23tn.

The development was disclosed in a statement issued on Sunday by the Nigerian Bulk Electricity Trading Plc, which said the latest bond issuance follows the success of the release of about N501bn in January 2026 under the programme approved by President Bola Tinubu.

According to the statement, the first coupon and principal repayment on the Series 1 bond fell due on July 14, 2026, and were settled promptly and in full, demonstrating the Federal Government’s commitment to meeting its contractual obligations and reinforcing investor confidence ahead of the second issuance.

It explained that the two issuances represent the N1.23tn Series 1 and Series 2 components of the Capital Market Multi-Instrument Issuance Programme, which is the first phase of the broader N4tn Presidential Power Sector Debt Reduction Programme approved by the President to address longstanding financial obligations in Nigeria’s electricity sector.

The statement noted that the January 2026 issuance formed part of the Federal Government’s fiscally responsible strategy to settle verified obligations owed to electricity generation companies, improve liquidity across the Nigerian electricity supply industry and strengthen the financial sustainability of the sector.

The Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, described the forthcoming issuance as another major milestone in the government’s efforts to restore liquidity, reinforce investor confidence and promote the long-term stability of 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. “By improving liquidity across the electricity value chain, the programme will help strengthen the financial position  of market  participants,  support  new investment  and  promote sustainable electricity generation for the benefit of Nigerians,” Aknnawo said.

Akinnawo recalled that the Federal Executive Council approved the establishment of the N4tn Presidential Power Sector Debt Reduction Programme in 2025, with the Nigerian Bulk Electricity Trading Plc designated as the sponsoring institution for the settlement of verified legacy debts in the electricity sector.

He explained that the approved framework provides for the programme to be implemented through multiple issuances of debt instruments by NBET Finance Company Plc, a special purpose vehicle established specifically for the programme.

According to him, the debt instruments are backed by the full faith and credit of the Federal Government and supported by a comprehensive package of risk mitigation measures designed to ensure successful execution of the programme.

“The programme has the full backing of the Federal Government and incorporates a robust suite

of instruments designed to mitigate transaction risks and support successful execution,” he said.

Akinnawo added that the issuance of the approximately N729bn second bond would mark another significant step towards resolving the longstanding financial obligations that have weighed on the electricity market for years.

He added, “The issuance of the approximately N729bn second bond would represent a decisive step towards resolving longstanding financial obligations and establishing a more stable, bankable and investment-friendly electricity market capable of supporting Nigeria’s economic growth.”

The government has maintained that the Presidential Power Sector Debt Reduction Programme is intended to address verified debts owed to electricity generation companies through a structured, market-based financing arrangement, while strengthening the financial sustainability of the Nigerian electricity supply industry and creating a more bankable environment capable of attracting fresh investments into the sector.

Source: https://punchng.com/fg-raises-n729bn-bond-to-clear-gencos-legacy-debts/