FG settles N333bn outstanding liability to eight GenCos

By Abubakar Yunus

The federal government says it has paid N333 billion to eight participating electricity generation companies (GenCos), covering 17 power plants, under the first phase of the power sector debt settlement programme.

Olu Verheijen, special adviser to the president on energy, spoke on Tuesday during the investor forum for the N729 billion series II bond issuance of the presidential power sector financial reforms programme (PPSFRP).

“Series I delivered on its promise. In February 2026, the Federal Government deployed approximately ₦501 billion, N300 billion in cash and roughly ₦201 billion through non-cash bond instruments, addressing approximately 22 percent of the settlement obligations under executed Settlement Agreements, with the balance to be covered through Series II and subsequent issuances,” she said.

“To date, ₦333.12 billion has been settled to the eight participating generation companies, covering seventeen power plants that have executed participation agreements.

“We met our obligation on schedule. The first Series I coupon about ₦63.5 billion was paid in full on 14 July 2026.”

Verheijen said in sovereign finance, trust compounds just as powerfully as interest.

She added that governments seeking to attract private capital must first prove they will honour their own commitments.

“That is exactly what this Programme has done. Bankability does not begin in financial markets. It begins with governments that honour contracts, meet obligations, and create predictable rules. Capital follows credibility. That principle has guided every stage of this Programme,” Verheijen said.

“That credibility is already translating into tangible improvements across the sector. Participating generation companies are meeting obligations to gas suppliers, lenders and operations and maintenance contractors that had previously gone unmet.

“Strong investor participation in Series I was therefore no coincidence. It reflected growing confidence in both this Programme and Nigeria’s broader reform agenda. We are grateful to every institution that placed that confidence in us.”

She said the issuance broadens the settlement of verified legacy debts, improves liquidity across the electricity value chain, and reinforces the financial base needed to attract long-term private investment into Nigeria’s power sector.

“By participating, you are not simply purchasing a financial instrument. You are investing in a reform programme designed to restore payment discipline, strengthen sector cash flows, crowd in private capital, and accelerate Nigeria’s economic transformation,” Verheijen said.

“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 manufacturers whose competitiveness improves because power becomes more dependable and affordable.”

On Monday, the federal government said it will issue the second tranche of a bond valued at about N729 billion for the settlement of verified legacy debts owed to GenCos.