Nigeria Prepares N701 Billion Bond for Power Sector Debt Amidst Genco Complaints

Nigeria's federal government is moving forward with arrangements for a second bond issuance, estimated at N701 billion, aimed at partially settling the power sector's outstanding legacy debt to Generation Companies (Gencos). This development comes amid accusations from the Association of Power Generation Companies (APGC) that the government excluded them from the bond program's design and imposed unfavorable terms on member firms.

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The federal government is progressing arrangements for the second tranche of approximately N701 billion in line with the presidential approval. The proceeds will be deployed towards eligible beneficiaries in accordance with executed Settlement Agreements and applicable transaction requirements.

The Nigerian Bulk Electricity Trading Plc (NBET) confirmed the progress toward this second tranche, which is expected to commence in July 2026. NBET's Acting Chief Financial Officer, Emily Yenvel, stated that the proceeds will be distributed to eligible beneficiaries according to executed Settlement Agreements and transaction requirements. This settlement is part of the Presidential Power Sector Debt Reduction Programme (PPSDRP), managed by the Presidential Power Sector Debt Reduction Committee (PPSDRC), with NBET as a member.

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The settlement is being implemented under the Presidential Power Sector Debt Reduction Programme (PPSDRP) through the Presidential Power Sector Debt Reduction Committee (PPSDRC) of which NBET is a member.

Yenvel clarified that the initial N501 billion Series I issuance was the first tranche of the approved program. She explained that payments are being implemented in phases, and comparing a beneficiary's total verified debt to the amount received in the first tranche does not represent the overall settlement. She also noted that the APGC was not involved in the settlement negotiations and is not a contractual party to the individual agreements, limiting NBET's role to implementing the executed agreements.

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The APGC was not part of the settlement negotiations and as it is not a contractual party to the individual Settlement Agreements.

However, APGC Chief Executive Officer, Dr. Joy Ogaji, previously told THISDAY that the government excluded the APGC from negotiations and pressured member companies to accept a 50 percent "haircut" on their debts. Ogaji stated that the APGC has rejected the process, asserting their exclusion since reconciliation concluded in March 2025. She further alleged that the Special Adviser to the President on Energy, Olu Verheighen, was unilaterally auditing invoices without input from the Nigerian Electricity Regulatory Commission (NERC) or the Nigerian Independent System Operator (NISO). Gencos last reconciled with NBET in March 2025, agreeing on a total legacy debt of N4 trillion from 2015 to December 2024.

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We have written severally to NBET, copied to the SA on Energy.