The Nigerian Bulk Electricity Trading Plc (NBET) has commenced payments to participating electricity generation companies (GenCos) and their associated gas suppliers following the successful issuance and signing of ₦728.979 billion in Series 2 Bonds under the Federal Government’s ₦4 trillion Power Sector Multi-Instrument Issuance Programme.

The development marks a major step in the implementation of President Bola Ahmed Tinubu’s Presidential Power Sector Debt Reduction Programme, which aims to address longstanding financial obligations within Nigeria’s electricity industry and improve the sector’s financial stability.

In a statement issued by NBET Managing Director and Chief Executive Officer, Akin Odeyemi, the company disclosed that the ongoing settlement is being executed through a combination of cash and non-cash bonds in line with the approved settlement framework.

According to the statement, the settlement comprises ₦402 billion in Cash Bonds and ₦326.979 billion in Non-Cash Bonds, bringing the total value of the Series 2 Bonds to ₦728.979 billion.

The programme forms part of the Federal Government’s broader efforts to resolve legacy debts in the power sector, improve liquidity across the electricity value chain and strengthen the financial position of companies involved in electricity generation and gas supply.

NBET explained that settling the outstanding obligations would help create a more sustainable financial framework for the Nigerian electricity market by improving payment discipline, strengthening liquidity and providing greater commercial certainty for industry participants.

The company also noted that addressing historical debts could improve the capacity of generation companies to maintain and upgrade their power generation facilities, potentially supporting increased electricity production and greater reliability across the national electricity market.

However, the extent to which the debt settlement will translate into improved electricity supply for consumers will depend on several factors, including the financial and operational performance of generation companies, gas availability, transmission capacity and distribution infrastructure.

Nigeria's electricity sector has faced persistent challenges, including inadequate power generation, gas supply constraints, transmission limitations, distribution losses and longstanding financial obligations among market participants.

The latest settlement is expected to help address some of the financial pressures affecting electricity generation and gas supply companies. Nevertheless, the ultimate impact on consumers will depend on whether the improved financial position of sector participants translates into more reliable electricity supply and better service delivery.

NBET Prepares For Second Phase

NBET disclosed that its immediate priority is to undertake preparatory activities for the commencement of the second phase of the Presidential Power Sector Debt Reduction Programme.

The next phase is expected to advance the objectives of the ₦4 trillion Power Sector Multi-Instrument Issuance Programme, which provides the broader financing framework for addressing outstanding obligations in the electricity sector.

The company said the initiative demonstrates the Federal Government's commitment to resolving historical liabilities while laying the foundation for a financially sustainable, commercially viable and investment-driven electricity market.

The statement further linked the programme to President Tinubu's Renewed Hope Agenda, which the administration has positioned as a framework for economic reforms and improvements in critical sectors of the economy.

Will The Debt Settlement Improve Electricity Supply?

Despite the commencement of payments, Nigerians will ultimately judge the programme by its practical impact on electricity supply, the cost of power and the financial sustainability of the electricity market.

While settling legacy obligations could ease financial pressure on generation companies and gas suppliers, questions remain about how quickly the benefits will translate into more consistent electricity supply for households and businesses.

Key issues include the implementation timeline for the second phase, the total outstanding obligations being addressed, the beneficiaries covered by the settlement and the measurable improvements expected in electricity generation and supply.

Greater transparency regarding these issues could help the public assess the programme's effectiveness and determine whether the financial intervention is delivering the intended results.

For electricity consumers who continue to experience supply disruptions and rising energy costs, the central concern remains whether the settlement will produce tangible improvements beyond the financial transactions taking place within the power sector.

NBET said it would continue to advance the objectives of the debt reduction programme as preparations for the second phase progress.

The statement was signed by Akin Odeyemi, Managing Director and Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc.