The Nigerian Bulk Electricity Trading Plc (NBET) has started settling debts to participating Generation Companies (GenCos) and their associated gas companies. This development follows the successful issuance and signing of the ₦728.979 billion Series 2 Bonds under the ₦4 trillion Power Sector Multi-Instrument Issuance Programme. This milestone represents a significant step in implementing the Presidential Power Sector Debt Reduction Programme under President Bola Ahmed Tinubu's Renewed Hope Agenda.
The settlement is being undertaken through a combination of ₦402,000,000,000.00 in cash bonds and ₦326,979,000,000.00 in non-cash bonds. This is in accordance with the approved settlement framework, according to NBET's Managing Director/CEO, Akin Odeyemi. The ongoing settlement signals a major step towards addressing historical obligations and restoring liquidity across the electricity value chain.
The settlement is expected to strengthen the financial position of power sector participants and provide a pathway for the Nigerian electricity market to transition towards a more sustainable market cash-flow framework. This framework is characterised by improved payment discipline, stronger liquidity, and greater commercial certainty to support continued investment across the value chain. A more financially stable generation segment is also expected to strengthen the capacity of GenCos.
Akin Odeyemi stated that beyond addressing legacy obligations, the development provides a pathway for the Nigerian electricity market to progressively transition towards a more sustainable market. This will support increased electricity generation and contribute to greater reliability across the Nigerian electricity market. The milestone demonstrates the Federal Government's commitment to resolving longstanding legacy obligations.
The Federal Government, under President Bola Ahmed Tinubu's leadership, aims to lay the foundation for a financially sustainable, commercially viable, and investment-driven electricity market. The current focus of NBET is on preparatory activities towards the commencement of the second phase of the Programme. The company continues to advance the objectives of the ₦4 trillion Power Sector Multi-Instrument Issuance Programme.
The Nigerian electricity market is expected to benefit from a more financially stable generation segment. This will enable GenCos to sustain and improve their generation assets, support increased electricity generation, and contribute to greater reliability. The settlement also signals a major step towards addressing historical obligations and restoring liquidity across the electricity value chain.
The ₦4 trillion Power Sector Multi-Instrument Issuance Programme is a significant initiative aimed at resolving longstanding legacy obligations in the power sector. The programme's implementation is a major step towards achieving a financially sustainable, commercially viable, and investment-driven electricity market in Nigeria. NBET's settlement of debts to GenCos and gas companies is a key aspect of this programme.
Key points
- NBET starts part-payment of N4trn debt to GenCos and gas companies.
- The settlement is being undertaken through a combination of cash and non-cash bonds.
- The development provides a pathway for the Nigerian electricity market to transition towards a more sustainable market cash-flow framework.
