FG raises N1.23 trillion to tackle N4 trillion GenCo debt

The Federal Government has issued N1.23 trillion in bonds as part of its Power Sector Debt Reduction Programme, aimed at settling N4 trillion in obligations owed to electricity Generation Companies (GenCos). Akin Odeyemi, CEO of Nigerian Bulk Electricity Trading Plc (NBET), revealed in Abuja that the second series of bond issuances raised N728.9 billion after the January Series 1 raised N501 billion.

The Series 2, launched in August, attracted 11 GenCos compared to eight in the first issuance, indicating growing confidence in the programme. The raised funds will be disbursed in two tranches, A and B, to tackle accumulated unpaid obligations that have weakened GenCos' financial positions and limited their ability to invest in new generation capacity.

The debt programme is seen as crucial for restoring liquidity and financial confidence in the Nigerian Electricity Supply Industry. Minister of Finance, Taiwo Oyedele, explained that Series 2 consists of N402 billion in cash bonds and N326.9 billion in non-cash bonds. However, he emphasized that settling the debt alone would not resolve the sector's financial challenges.

Minister of Power, Joseph Tegbe, highlighted the issuance's significance in demonstrating the government's commitment to addressing structural weaknesses in the electricity industry and strengthening the sector's financial position.