FG Inks ₦729 Billion Bond Deal with GenCos to Stabilize National Power Grid

ABUJA — In a major bid to resolve the severe financial distress crippling the Nigerian Electricity Supply Industry (NESI), the Federal Government has formally executed a ₦728.9 billion Series-2 Bond Agreement with electricity Generation Companies (GenCos).  

The landmark deal, finalized under the government’s ₦4 trillion Power Sector Multi-Instrument Issuance Programme, represents a decisive intervention aimed at clearing accumulated legacy debts and restoring cash flow across the energy value chain.  

Tackling a ₦4 Trillion Liquidity Deficit

The power sector has long been burdened by billions of Naira in unpaid invoices for electricity delivered to the national grid. Unsettled obligations have left major generating facilities unable to purchase adequate natural gas supplies or execute essential maintenance on gas turbines, frequently causing grid instability and nationwide blackouts.

This latest ₦729 billion tranche brings the combined value of power-sector bond issuances to ₦1.23 trillion over the past nine months, successfully concluding Phase 1 of the government’s liquidity recovery initiative.

The debt resolution structure provides GenCos with promissory notes and non-cash bonds, allowing power producers to satisfy upstream debt liabilities with gas suppliers and commercial financial institutions.

Industry Leaders React

Economic analysts and industry stakeholders have welcomed the agreement as a necessary shock absorber for a sector edging toward insolvency.

“By addressing the cash-flow bottleneck at the generation level, we are taking a crucial step toward stabilizing the power market,” said senior energy officials during the signing. “GenCos can now focus on increasing power output without the looming overhang of crippling balance-sheet liabilities.”

GenCo operators noted that guaranteed debt clearance would immediately free up operational working capital, allowing plant managers to reactivate idle capacity and optimize output into the national grid.

Looking Ahead

While the ₦729 billion injection offers critical short-term relief, energy experts emphasize that structural reforms remain essential. Industry stakeholders continue to call for cost-reflective tariffs, improved revenue collection efficiency by Distribution Companies (DisCos), and accelerated metering implementation across urban centers to ensure long-term solvency.

The Federal Government confirmed that subsequent phases of the ₦4 trillion debt-clearing programme will roll out progressively to stabilize distribution networks and enhance total grid delivery capacity.