The Federal Government has settled N333.12 billion in verified legacy debts owed to eight electricity generation companies (gencos) operating 17 power plants, as it launched the second phase of bond issuance under the Presidential Power Sector Financial Reforms Programme (PPSFRP).

The Special Adviser to the President on Energy, Olu Verheijen, disclosed this yesterday at an investor forum in Abuja convened to market the Series II bond to institutional investors, development finance institutions and other financial market participants.

According to her, the latest disbursement follows an earlier Series I issuance under which the government deployed about N501 billion—comprising N300 billion in cash and about N201 billion through non-cash bond instruments to settle roughly 22 per cent of obligations under executed agreements with electricity generation companies.

She said the balance of the verified debts would be addressed through the Series II issuance and subsequent bond offerings.

Verheijen also disclosed that the government paid the first Series I coupon, valued at about N63.5 billion, in full on July 14, 2026, describing the payment as evidence of the programme’s commitment to meeting its obligations.

“Markets do not reward promises. They reward performance. That is why we deliberately chose execution before expansion,” she said, adding that while Series I had “proved the model”, Series II was designed to “scale it.”

She said the settlement programme was already improving liquidity across the electricity value chain, enabling participating generation companies to meet obligations to gas suppliers, lenders and operations and maintenance contractors that had previously remained unpaid.

According to her, the Series II bond will deepen the settlement of verified legacy obligations, strengthen liquidity in the sector and improve its ability to attract long-term private investment.

The Presidential Power Sector Financial Reforms Programme was established under President Bola Tinubu’s Renewed Hope Agenda to address the longstanding accumulation of unpaid obligations across Nigeria’s electricity value chain, a challenge that has constrained liquidity, gas supply and investment in power generation.

The programme is chaired by the Minister of Finance and Coordinating Minister of the Economy and involves the Ministry of Power, the Debt Management Office (DMO), the Bureau of Public Enterprises (BPE), the Budget Office of the Federation and Nigerian Bulk Electricity Trading Plc (NBET).

Nigeria’s electricity sector has grappled with persistent liquidity challenges for years, largely driven by the gap between the cost of generating and distributing electricity and revenues collected across the value chain, as well as unfunded tariff subsidies. The financing shortfall has weakened generation companies’ balance sheets, discouraged fresh investment and remained a major constraint to improving electricity supply.

Despite previous government commitments to clear legacy obligations, implementation has often been slow, making the pace of disbursement under the Series II programme a key indicator that investors and power producers are expected to monitor closely.