•14 GenCos sign deal
By Obas Esiedesa, Abuja
The Federal Government has raised N501.02 billion from the bond market to begin settling outstanding debts owed to power generation companies (GenCos), as part of efforts to reduce over N6 trillion liabilities in the electricity sector.
The funds were mobilised through the issuance of two bond tranches: a N300 billion seven-year Series 1 Tranche A bond and a N201.02 billion seven-year Series 1 Tranche B bond, both priced at 17.50 per cent. The bonds were issued by NBET Finance Company Plc, a special purpose vehicle created by the Nigerian Bulk Electricity Trading Plc (NBET), and are fully guaranteed by the Federal Government under the Presidential Power Sector Debt Reduction Programme (PPSDRP).
Speaking at the agreement signing ceremony in Lagos, the Special Adviser on Energy to President Bola Tinubu, Mrs Olu Verheijen, said the programme was designed to resolve long-standing payment arrears owed to GenCos and reset the electricity market.
According to her, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements. She disclosed that 14 generation companies have signed Full and Final Settlement Agreements with a total negotiated value of about N827 billion.
Verheijen said proceeds from the Series 1 bond issuance would fund first and second instalment payments to participating GenCos, estimated at N421.42 billion, representing roughly 50 per cent of the negotiated settlement value. Payments, she added, would be made through a mix of cash and notes.
Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, represented by the Director-General of the Debt Management Office (DMO), Ms Patience Oniha, acknowledged that legacy power sector debts had constrained growth for years, stressing that resolving them was critical to sector reform.
NBET Acting Managing Director, Mr Johnson Akinnawo, described the bond issuance as a major milestone that would improve liquidity across the power value chain and support new investments.
Some of the GenCos that signed the deal include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited.
The post FG raises N501bn from bond market to settle GenCos’ debt appeared first on Vanguard News.
