The Federal Government has paid approximately ₦333.12 billion to eight electricity generation companies under its programme to resolve accumulated financial obligations in Nigeria’s power industry.
The payments cover 17 power plants whose operators entered settlement agreements under the Presidential Power Sector Financial Reforms Programme.
The government also paid approximately ₦63.5 billion as the first coupon obligation on the initial bond issued under the programme.
The payment, completed on July 14, 2026, represents an important test of the government’s commitment to servicing the debt instruments supporting the intervention.
The first phase of the programme deployed about ₦501 billion in February 2026. This comprised approximately ₦300 billion in cash and ₦201 billion in non-cash bond instruments.
According to government estimates, the initial intervention addressed about 22 percent of the verified obligations covered by executed agreements with participating generation companies.
Nigeria’s electricity market has struggled with a persistent shortage of cash caused by inadequate collections, pricing deficiencies and payment shortfalls across the power value chain. These problems have limited the ability of generation companies to maintain plants, service debt and invest in additional capacity.
The settlement programme seeks to convert verified liabilities into structured financial instruments while providing immediate liquidity to affected companies.
Following the first issuance, the government is proceeding with a second bond valued at approximately ₦729 billion. The instrument is expected to complete the first phase of the broader debt-reduction initiative and take the combined value of the two issuances to about ₦1.23 trillion.
The overall programme has an approved size of ₦4 trillion and will be implemented through several capital-market transactions.
NBET Finance Company Plc, a special-purpose vehicle established by the Nigerian Bulk Electricity Trading Plc, is responsible for issuing the instruments.
The securities carry the backing of the Federal Government and include measures intended to reduce repayment and transaction risks.
The successful payment of the first coupon is particularly important for institutional investors evaluating the second issuance. Timely debt servicing could improve confidence in the programme and strengthen demand for subsequent instruments.
For generation companies, the ₦333.12 billion payment provides liquidity that could support maintenance, gas purchases, debt repayment and other operating requirements.
However, settling historical obligations will not by itself resolve the structural causes of the industry’s financial problems.
The long-term effectiveness of the intervention will depend on improved revenue collection, commercially sustainable tariffs, stronger payment discipline and lower technical and commercial losses.
Without these reforms, new liabilities could accumulate even after the government clears existing debts.