By Onu Okorie

Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the Federal Executive Council had approved a N4 trillion Power Sector Debt Reduction Initiative following a comprehensive verification of electricity market liabilities.

He explained that the verification exercise reduced outstanding claims from over N4 trillion to about N3.3 trillion after a detailed review of services rendered and amounts due.

Oyedele said the second bond issuance, valued at about N729 billion, would complete the first phase of the programme by extending payments to additional generation companies, gas suppliers and other eligible service providers.

According to him, the successful payment of the first bond coupon reinforced the government’s credibility and strengthened investor confidence.

“Investors do not reward intentions; they reward execution. Every commitment honoured today reduces the cost of capital tomorrow,” the minister said.

He added that the bond programme aligns with the Federal Government’s broader economic reforms aimed at strengthening public finances, expanding infrastructure financing and mobilising long-term private capital for strategic sectors.

The Federal Government has disclosed that it has disbursed about N333 billion to eight electricity generation companies (GenCos) under its Power Sector Debt Reduction Programme, while launching a second N729 billion bond issuance to clear additional legacy debts and improve liquidity in Nigeria’s electricity market.

The disclosure was made on Tuesday at an investors’ forum organised by the Nigerian Bulk Electricity Trading (NBET) Plc in Abuja, where senior government officials said the new bond issuance would conclude the first phase of the Presidential Power Sector Debt Reduction Programme aimed at resolving verified debts and restoring investor confidence in the Nigerian Electricity Supply Industry (NESI).

Special Adviser to the President on Energy, Mrs. Olu Verheijen, said the implementation of the programme had demonstrated the Federal Government’s resolve to honour verified obligations to market participants.

She disclosed that under the first series of the programme, launched in February 2026, the government deployed about N501 billion, comprising N300 billion in cash and N201 billion in bond instruments, to settle part of outstanding liabilities owed to electricity generation companies.

According to her, N333 billion has already been paid to eight participating GenCos operating 17 power plants, while the first coupon payment of about N63.5 billion on the seven-year bond was paid in full on July 14, 2026.

Verheijen said the payments had enabled participating generation companies to meet obligations to gas suppliers, lenders and operations and maintenance contractors, improving liquidity across the electricity value chain.

“Markets do not reward promises; they reward performance. Capital follows credibility,” she said, adding that the second bond issuance would further strengthen market liquidity and create the financial stability required to attract long-term private investment into the sector.

She described the initiative as more than a debt settlement programme, saying it was designed to improve electricity reliability, support businesses and accelerate Nigeria’s economic transformation.

Former Acting Managing Director of NBET, Mr. Johnson Akinnawo, also encouraged investors to subscribe to the second bond series, noting that the successful execution of the first issuance had demonstrated the credibility of power sector securities.

He acknowledged that while challenges persist within the electricity industry, the Federal Government has continued to pursue financial and structural reforms aimed at restoring the sector’s long-term sustainability.