The Federal Government has raised about N1.23 trillion through two bond issuances to tackle N4 trillion legacy debt owed to electricity Generation Companies, GenCos.
Akin Odeyemi, Chief Executive Officer, Nigerian Bulk Electricity Trading Plc., NBET, disclosed this during the ceremony in Abuja on Monday.
Odeyemi said the latest Series 2 issuance raised N728.9 billion, following N501 billion secured through Series 1 in January.
He said Series 2, launched in August, involved 11 GenCos, compared with eight companies that participated in the first issuance.
According to him, the increased participation reflects growing stakeholder confidence in the debt reduction programme.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme,” Odeyemi said.
He said the participation also demonstrated the programme’s ability to provide a credible framework for addressing verified outstanding obligations.
Odeyemi said the N728.9 billion Series 2 bond would be implemented in two tranches, identified as Tranches A and B.
He said accumulated outstanding obligations had affected the ability of electricity market participants to meet their financial commitments.
The NBET chief executive said the debt burden had also constrained GenCos’ capacity to invest further in electricity generation.
“It is therefore important that the Debt Reduction Programme is viewed not simply as an initiative for settling historical debt,” he said.
Odeyemi said the programme should instead be viewed as part of broader efforts to restore financial confidence, liquidity and sustainability.
“It should also be viewed as part of a broader effort to restore financial confidence, liquidity and sustainability to the Nigerian Electricity Supply Industry,” he said.
Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, said Series 2 comprised N402 billion in cash bonds.
Oyedele said another N326.9 billion was allotted as non-cash bonds to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
He said the transaction addressed accumulated legacy obligations that had weakened liquidity and constrained investment across the electricity market.
“This transaction addresses an important challenge in Nigeria’s electricity market, which is accumulated legacy obligations,” Oyedele said.
According to him, the obligations had also affected confidence across the electricity value chain.
Oyedele said the Federal Government’s objective was to resolve legitimate legacy obligations through a structured and transparent process.
He stressed that the bond programme must be accompanied by reforms capable of preventing the recurrence of similar debts.
