FG launches N729bn bond to clear power sector legacy debts

…confirms settlement of 22% of debts owed to GenCos

By Precious Mark

The Federal Government has launched the issuance of a N729 billion Series II bond under the Presidential Power Sector Financial Reforms Programme (PPSFRP) to resolve legacy debts and restore liquidity to the power sector.

Speaking on Tuesday in Abuja at the PPSFRP Series II Investor Forum, the Special Adviser to the President on Energy, Olu Arowolo Verheijen, disclosed that the government has already paid out N333.12 billion to eight generation companies (GenCos) covering 17 power plants under the earlier Series I tranche.

Verheijen stated that President Bola Ahmed Tinubu’s administration is breaking away from fiscal dysfunction by transforming market liabilities into bankable, well-governed investment opportunities.

Under Series I, deployed in February 2026, the government raised N501 billion comprising N300 billion in cash and N201 billion in non-cash instruments to cover roughly 22% of verified settlement obligations.

“Markets do not reward promises, they reward performance,” Verheijen told investors and development partners.

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

She explained that these prompt payments have allowed GenCos to clear outstanding debts with gas suppliers, lenders, and maintenance contractors.

The new N729 billion Series II issuance aims to scale this model across the entire power value chain.

“Bankability begins with governments that honor contracts and create predictable rules,” she added, emphasizing that the program is a critical mandate designed to deliver reliable electricity for homes, small businesses, and manufacturers.

The forum brought together senior officials, including the Minister of Finance and Coordinating Minister of the Economy, the Minister of Power, the Directors-General of the Debt Management Office (DMO) and Bureau of Public Enterprises (BPE), and representatives of Nigerian Bulk Electricity Trading Plc (NBET), alongside key transaction advisers.