FG plans N729bn bond issuance to settle GenCos’ debt

By Abubakar Yunusa

The federal government says it will issue the second tranche of a bond valued at about N729 billion for the settlement of verified legacy debts owed to electricity generation companies (GenCos).
In a statement on Monday by the Nigerian Bulk Electricity Trading (NBET) Plc, the agency said the proposed issuance will complete the first phase of the presidential power sector debt reduction programme (PPSDRP).
The development comes after the federal government issued a N501 billion inaugural bond under the programme in January.
According to the statement, the federal government will host an investors’ forum on July 21, ahead of the issuance of the second bond.
“Notably, the first coupon and principal repayment on the Series 1 bond fell due on 14 July 2026 and was paid promptly and in full, underscoring the Federal Government’s creditworthiness, its unwavering commitment to contractual obligations, and the reliability of income to investors under the programme – a track record expected to further reinforce market confidence ahead of the second issuance,” NBET said.
“Together, the two issuances constitute the N1.23 trillion Series 1 and 2 components of the Capital Market Multi-Instrument Issuance Programme.
“This represents the first phase of the broader N4 trillion programme approved by President Bola Ahmed Tinubu, GCFR, to address legacy financial obligations in Nigeria’s electricity sector.”
The agency said the January 2026 issuance was part of the federal government’s fiscal responsibility strategy to enhance liquidity across the power sector and reinforce the financial sustainability of the Nigerian electricity supply industry (NESI).
Johnson Akinnawo, chief executive officer (CEO) of the NBET, described the forthcoming issuance as another significant milestone in the federal government’s efforts to promote the long-term stability of the power sector.
“The second issuance demonstrates the Federal Government’s commitment to resolving verified legacy obligations through a transparent, structured and market-based mechanism,” Akinnawo said.
“By improving liquidity across the electricity value chain, the programme will help strengthen the financial position of market participants, support new investment and promote sustainable electricity generation for the benefit of Nigerians.”
Akinnawo said the federal executive council (FEC) had approved the establishment of the N4 trillion PPSDRP in 2025, with NBET designated as the sponsoring institution for the settlement of verified legacy debts.
He said the programme will be implemented through multiple debt issuances by NBET Finance Company Plc, a special-purpose vehicle created specifically for the initiative.
According to the NBET CEO, the debt instruments are backed by the full faith and credit of the federal government and supported by a comprehensive risk-mitigation framework.
“The programme has the full backing of the Federal Government and incorporates a robust suite of instruments designed to mitigate transaction risks and support successful execution,” he said.