Five electricity generation companies have executed settlement agreements valued at ₦827.16 billion under the Federal Government’s power sector debt resolution framework.
The agreements were signed with Nigerian Bulk Electricity Trading Plc (NBET) as part of the Presidential Power Sector Debt Reduction Programme, which is designed to address verified receivables for electricity supplied over the past decade.
The programme targets legacy obligations that have constrained liquidity, weakened balance sheets, and delayed investment across the power value chain.
The participating generation companies are First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited, which together operate 14 power plants nationwide.
Under the settlement structure, payments will be made in four phased instalments, with the first two tranches—estimated at ₦421.42 billion, representing about 50 percent of the negotiated amount—to be funded through proceeds from the recently issued ₦501 billion Series 1 power sector bond.
The initial payments will be delivered through a combination of cash and promissory notes.
Officials involved in the programme said the agreements follow a validation process covering electricity supplied between February 2015 and March 2025, ensuring that only confirmed claims are settled.
The approach combines negotiated settlements with capital market financing to restore liquidity while reinforcing fiscal discipline within the electricity market.
Industry participants expect the settlements to ease cash flow pressures on generation companies, improve their capacity to meet operating and debt obligations, and unlock delayed maintenance and expansion projects.
Analysts note that resolving legacy arrears is critical to restoring confidence and attracting fresh investment into power generation.
While broader challenges persist across transmission and distribution, the signing of the ₦827 billion settlement agreements is being viewed as a foundational step in resetting the financial structure of Nigeria’s power sector and supporting more sustainable electricity supply over the medium term.