LAGOS – The Federal Government has launched a N729 billion ($500 million) sovereign-backed bond under the second series of its Presidential Power Sector Debt Reduction Programme to settle verified legacy debts owed to electricity generation companies.
The issuance by NBET Finance Company Plc completes the first phase of the N4 trillion intervention programme, following the full redemption of the initial N501 billion Series 1 tranche on July 14, 2026.
Proceeds will flow directly to thermal and hydro power producers, enabling them to settle overdue gas supply obligations, meet maintenance commitments, and restore deferred generation capacity across national grid networks.
Gas producers have repeatedly curtailed fuel supply to generation stations over accumulated arrears, leaving available national grid output fluctuating below 5,000 megawatts despite total installed capacity exceeding 13,000 megawatts.
Under the preceding Series 1 tranche, over N333 billion was disbursed across eight participating generation companies covering 17 power plants, significantly alleviating balance sheet stress for major thermal electricity producers.
While the capital injection stabilizes upstream generation liquidity, market analysts warn that structural revenue shortfalls will persist until distribution companies reduce aggregate technical, commercial, and collection losses below current high thresholds.
The debt securitization strategy converts legacy liabilities into sovereign-backed debt, extending repayment horizons while preserving generation company solvency and stabilizing gas supplier cash flows across Africa’s largest economy.
