The Federal Government has disbursed N333.12bn to eight electricity generation companies under the first phase of its legacy debt settlement programme, in a move aimed at restoring confidence in Nigeria’s troubled power sector and improving electricity supply.
The payment, which covers 17 power plants that signed participation agreements with the government, forms part of a broader financial reform initiative designed to address long-standing debts owed to power generation companies.
Special Adviser to the President on Energy, Olu Verheijen, disclosed this on Tuesday during the investor forum for the second series of the Presidential Power Sector Financial Reforms Programme bond issuance.
She said the settlement followed the successful implementation of the first bond series launched earlier this year.
According to Verheijen, the Federal Government deployed about N501bn in February 2026, comprising N300bn in cash and approximately N201bn through non-cash bond instruments, to settle about 22 per cent of verified obligations captured in executed settlement agreements.
She said, “To date, N333.12bn has been settled to the eight participating generation companies covering 17 power plants that have executed participation agreements.
“We met our obligation on schedule. The first Series I coupon of about N63.5bn was paid in full on July 14, 2026.”
The presidential aide stressed that timely settlement of obligations was critical to rebuilding investor confidence and attracting private capital into the country’s electricity industry.
“In sovereign finance, trust compounds just as powerfully as interest. Governments seeking to attract private capital must first prove they will honour their commitments,” she said.
Verheijen noted that the debt settlement programme had already begun yielding positive results, with participating generation companies now meeting outstanding obligations to gas suppliers, lenders, and operations and maintenance contractors.
She attributed the strong investor participation recorded during the first bond issuance to growing confidence in both the reform programme and the Federal Government’s broader economic agenda.
She added that the second bond issuance would expand the settlement of verified legacy debts, improve liquidity across the electricity value chain and strengthen the sector’s financial foundation for long-term private investment.
According to her, investors participating in the programme are supporting reforms aimed at restoring payment discipline, strengthening cash flow within the power sector and accelerating Nigeria’s economic transformation.
Verheijen said beyond financial reforms, the programme was expected to deliver tangible benefits to ordinary Nigerians through more reliable electricity supply.
“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 manufacturers whose competitiveness improves because power becomes more dependable and affordable,” she said.
The latest payment comes a day after the Federal Government announced plans to issue a second tranche of bonds worth about N729bn to settle the remaining verified legacy debts owed to electricity generation companies.
The debt settlement initiative is part of ongoing efforts by the Tinubu administration to resolve the liquidity crisis that has plagued Nigeria’s power sector for years, improve the financial viability of electricity market operators and encourage fresh private investment.
FOLLOW US
FOR MORE HERE
