The Federal Government on Tuesday said it had fulfilled all commitments under the first tranche of its power sector debt financing programme, disclosing that it deployed about N501bn to settle part of the long-standing legacy debts owed to electricity generation companies and paid the first bond coupon on schedule.
It disclosed that N333bn has so far been paid to eight participating GenCos covering 17 power plants under the first phase of the power sector debt settlement programme.
The government said the successful execution of Series I of the Power Sector Multi-Instrument Issuance Programme had restored investor confidence in Nigeria’s electricity market and laid the foundation for the launch of a N729bn Series II bond, which it said would deepen liquidity across the power value chain.
The Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, disclosed this on Tuesday at the Nigerian Bulk Electricity Trading Finance Company Plc Series II Bond Issue Investors’ Forum in Abuja.
According to her, the Tinubu administration deliberately chose to demonstrate its credibility by honouring every obligation to investors before returning to the capital market for another round of fundraising.
She said, “Every successful capital market tells the same story. Investors return where governments keep their promises. And today’s lecture is exactly about that. President Bola Tinubu’s administration has demonstrated, beyond doubt, its commitment to making a clean break from the fiscal dysfunction that once defined Nigeria’s power sector.
“Through bold policy decisions and disciplined execution, we are converting an unsustainable liability into a bankable, well-governed investment opportunity that the market can trust.”
Verheijen explained that rather than merely restructuring debts on paper, the government had begun converting legacy liabilities into fresh liquidity capable of supporting investments across the electricity value chain.
She said, “We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity. That liquidity, if sustained, will strengthen the entire electricity value chain, improve operational performance, and restore confidence across the sector. That is precisely what the Presidential Power Sector Financial Reforms Programme was established to achieve under the Renewed Hope Agenda.”
She stressed that credibility, not promises, was driving the government’s reform agenda.
According to her, “Markets do not reward promises. They reward performance. And that is why we deliberately chose execution before expansion.”
Providing details of the first issuance, Verheijen disclosed that the Federal Government injected approximately N501bn into the settlement programme in February this year.
She said, “Series I delivered on its promise. In February 2026, the Federal Government deployed approximately N501bn—N300bn in cash and N201bn through non-cash bond instruments—addressing approximately 22 per cent of the settlement obligations under executed settlement agreements, with the balance to be covered through Series II and subsequent issuances.”
She further revealed that the settlement had already benefited eight electricity generation companies operating 17 power plants.
According to her, “To date, N333bn has been settled to eight participating generation companies, covering 17 power plants, and they have executed those participation agreements.”
Verheijen also announced that the government had honoured its first debt servicing obligation under the programme.
She said, “We have met our obligations on schedule. Thank you to the Director-General of the Debt Management Office. The first Series I coupon, about N63.5bn, was paid in full on July 14, 2026.”
She argued that the prompt payment had strengthened investor confidence in the government’s commitment to reforming the electricity market.
According to her, “In sovereign finance, trust compounds just as powerfully as interest does. Governments that expect private capital to invest must also demonstrate their own commitment and that those commitments will be honoured. That is exactly what this programme has done.”
She added, “Bankability doesn’t begin in financial markets. It begins with governments that honour their contracts, that meet their obligations, that create predictable rules. Capital follows credibility.”
The presidential aide said the impact of the intervention was already visible across the electricity industry.
She stated, “Participating generation companies are now meeting their gas obligations. Lenders and operation and maintenance contracts that had previously gone unmet are now being met. Strong investor participation in Series I was therefore no coincidence. It reflected growing confidence in both this programme and Nigeria’s broader reform agenda.”
She noted that the second issuance would extend the settlement of verified legacy debts while strengthening the financial foundation of the electricity industry.
According to her, “Series I has proved the model and Series II is going to scale it. This issuance extends the settlement of verified legacy obligations and deepens liquidity through the electricity value chain. It further strengthens the financial foundations needed to attract long-term capital into this power sector.”
She urged investors to view the bond beyond its financial returns.
“By participating, you are not simply purchasing a financial instrument. You are investing in a reform programme that is designed to restore payment discipline, strengthen cash flows, crowd in private capital, and accelerate Nigeria’s economic transformation.”
She added that reliable electricity remained central to economic growth.
“Ultimately, however, this programme is not only about balance sheets or capital markets. It is about the student who gains another hour to study because electricity is reliable. It is about the small business owner who no longer depends on expensive diesel to remain open. It is about the manufacturer whose competitiveness improves because power becomes more dependable and affordable.”
Also speaking, the Acting Managing Director and Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc, Johnson Akinnawo, said the success of Series I had demonstrated that Nigerian power sector debt instruments could attract investor confidence.
He recalled that the first issuance was presented as a test of whether legacy debts in the power sector could be resolved through transparent capital market instruments.
Akinnawo said, “When we came to the market with Series I, we did not present it as a routine capital raise. We presented it as a test of a proposition: that Nigerian legacy power sector debt, the kind that has sat on generation company books for years, distorting investment decisions and starving the sector of confidence, could be resolved through disciplined, transparent capital market instruments rather than endless promises.”
He commended investors for supporting the maiden issuance.
According to him, “You answered that call. The N501bn answered that call. And we met the promises. When the coupon and principal repayments fell due on July 14, we met the promises. The Federal Government of Nigeria ensured that the coupon and principal repayments were made on time.”
Akinnawo added that improved liquidity across the electricity value chain was already evident.
He said, “The evidence of your trust is visible today in improved liquidity across the value chain. Nigerian power sector paper has proven that it is bankable.”
He disclosed that the government was now seeking to raise approximately N729bn under Series II to continue settling verified legacy obligations and stabilising the electricity market.
The Power Sector Multi-Instrument Issuance Programme, backed by the Federal Government, was created under the Presidential Power Sector Financial Reforms Programme to address the mounting legacy debts owed to electricity generation companies.
Years of unpaid invoices have constrained liquidity across the electricity value chain, leaving GenCos unable to meet gas supply obligations, service loans and maintain critical infrastructure.
Under Series I, the government raised and deployed N501bn, comprising N300bn in cash and N201bn in non-cash bond instruments, settling about 22 per cent of verified obligations under executed settlement agreements.
With the successful payment of the first coupon and principal obligations, the government is seeking to raise about N729bn under Series II to continue the settlement programme and improve the bankability of Nigeria’s power sector.