The Nigerian Bulk Electricity Trading (NBET) has commenced payments of N728.98 billion in legacy debts owed to Generation Companies (GenCos) and their associated gas suppliers. This development follows the successful issuance and signing of N728.979 billion Series 2 Bonds under the N4 trillion Power Sector Multi-Instrument Issuance Programme. The payments are part of the Presidential Power Sector Debt Reduction Programme.
According to NBET Managing Director, Mr Akin Odeyemi, the settlement comprises N402 billion in Cash Bonds and N326.979 billion in Non-Cash Bonds. This is in line with the approved settlement framework. The initiative aims to address historical financial obligations and restore liquidity across the electricity value chain. It also seeks to strengthen the financial position of participants across the power sector.
Odeyemi described the development as a significant milestone in implementing the debt reduction programme under President Bola Tinubu’s administration. The initiative supports the objectives of the Federal Government’s Renewed Hope Agenda. By settling these debts, the programme is expected to have a positive impact on the power sector. It will help improve the financial stability of GenCos and enhance their capacity to maintain and improve power generation assets.
The ongoing settlement is anticipated to progressively transition the Nigerian electricity market toward a more sustainable market cash-flow framework. This framework will be characterised by improved payment discipline, stronger liquidity, and greater commercial certainty. These improvements will support continued investment across the value chain. A more financially stable generation segment will strengthen GenCos’ capacity to maintain and improve their power generation assets.
Improved financial stability will also support increased electricity generation and enhance reliability across the Nigerian electricity market. The NBET managing director said the milestone demonstrated the Federal Government’s commitment to resolving longstanding financial obligations in the power sector. By settling these debts, the government aims to lay the foundation for a financially sustainable, commercially viable, and investment-driven electricity market.
Odeyemi said NBET was currently undertaking preparatory activities for the commencement of the programme’s second phase. The company will continue advancing the objectives of the N4 trillion Power Sector Multi-Instrument Issuance Programme. This programme is designed to address the financial challenges in the power sector and promote a more sustainable electricity market.
The successful implementation of the debt reduction programme will have a positive impact on the power sector. It will help improve the financial stability of GenCos, enhance their capacity to generate electricity, and promote a more sustainable electricity market. The programme’s success will also demonstrate the Federal Government’s commitment to resolving longstanding financial obligations in the power sector.
Key points
- NBET starts paying N728.98 billion legacy debts to GenCos and gas suppliers.
- The payments are part of the Presidential Power Sector Debt Reduction Programme.
- The initiative aims to address historical financial obligations and restore liquidity across the electricity value chain.
