In a major financial move aimed at stabilising Nigeria’s struggling power sector, the Federal Government has raised ₦501 billion from the bond market to settle outstanding debts owed to electricity Generation Companies (GenCos).
The funds, sourced through government-backed bonds, are expected to ease the long-standing liquidity crisis in the electricity industry, where GenCos have repeatedly complained of huge payment backlogs affecting operations, maintenance, and power generation capacity.
According to industry insiders, the debt settlement plan is designed to restore confidence among power producers, improve cash flow across the electricity value chain, and ultimately boost electricity supply nationwide. For years, GenCos have argued that unpaid invoices and mounting debts have limited their ability to invest in infrastructure and meet generation targets.
The government’s decision to raise fresh funds from the bond market signals a renewed commitment to addressing structural challenges in the power sector. Analysts say the move could help unlock further investments and reduce the financial pressure currently choking the industry.
While the bond issuance increases public borrowing, officials insist the intervention is necessary to prevent further decline in electricity generation and ensure energy security for homes and businesses.
Stakeholders are now watching closely to see how the funds will be disbursed and whether the intervention will translate into improved power supply and reduced outages across the country.
