FG Begins ₦4trn Power Sector Debt Settlement, Captures Five GenCos
The Federal Government has commenced the settlement of over ₦4 trillion in legacy debts owed to power generation companies (GenCos), marking a significant step towards stabilising Nigeria’s electricity sector.
As part of the initiative, the government issued a ₦501 billion power sector bond and signed settlement agreements with five generation companies, covering 14 power plants across the country.
The move is being implemented under the Presidential Power Sector Debt Reduction Programme (PPSDRP) and targets verified debts accumulated for electricity supplied to the national grid over several years. The bond issuance, which recorded full subscription from investors, is designed to provide immediate liquidity to GenCos while creating a structured framework for clearing outstanding obligations.
The five GenCos that have so far signed agreements include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited (NDPHC). The total settlement value for these companies is estimated at about ₦827 billion, to be paid in phases.
Officials said the bond, arranged through a special purpose vehicle linked to the Nigerian Bulk Electricity Trading Plc (NBET), is backed by the Federal Government’s guarantee. Proceeds from the inaugural tranche will fund the first phase of payments to participating GenCos.
The Federal Government said the programme is aimed at restoring confidence in the power sector, improving cash flow across the electricity value chain, and encouraging new investments. Industry analysts have long argued that unresolved legacy debts have constrained generation capacity, affected gas supply agreements, and discouraged fresh capital inflows.
Government sources noted that additional bond issuances and settlement agreements with other GenCos are expected as the programme progresses, with the overall goal of improving electricity supply reliability and financial sustainability in the sector.
The debt settlement initiative is seen as one of the most concrete efforts in recent years to address structural challenges in Nigeria’s power industry and unlock its growth potential.
