The Nigerian Bulk Electricity Trading Plc (NBET) has commenced payments to participating power generation companies (GenCos) and their associated gas companies under the Federal Government’s Power Sector Debt Reduction Programme.

The settlement follows the successful issuance and signing of ₦728.979 billion Series 2 Bonds under the ₦4 trillion Power Sector Multi-Instrument Issuance Programme.

In a statement, NBET Managing Director and Chief Executive Officer, Mr Akin Odeyemi, said the settlement was being implemented under the Presidential Power Sector Debt Reduction Programme initiated by President Bola Tinubu’s administration.

According to him, the settlement comprises ₦402 billion in cash bonds and ₦326.979 billion in non-cash bonds, in line with the approved framework.

Odeyemi said the initiative was designed to address outstanding historical obligations, improve liquidity across the electricity value chain and strengthen the financial position of participants in the power sector.

He added that settling the legacy debts would help the electricity market transition towards a more sustainable cash-flow framework, with improved payment discipline, stronger liquidity and greater commercial certainty for investors.

The NBET chief executive said a more financially stable generation segment would also improve the capacity of GenCos to maintain and sustain their generating assets, support increased electricity generation and contribute to improved reliability in the Nigerian electricity market.

He said the development reflected the Federal Government’s commitment to resolving longstanding financial obligations while laying the foundation for a commercially viable and investment-driven electricity market.

Odeyemi disclosed that NBET was undertaking preparatory activities for the second phase of the programme as it continued to implement the ₦4 trillion Power Sector Multi-Instrument Issuance Programme.

The debt reduction initiative is intended to address accumulated obligations in the electricity market, where financial constraints have affected liquidity and the ability of market participants to meet their commitments.

The settlement of the outstanding obligations is expected to ease some of the financial pressures on generation companies and gas suppliers, while supporting efforts to improve the electricity market’s overall financial sustainability.