The Nigerian Bulk Electricity Trading Plc (NBET) says it has commenced the settlement of participating Generation Companies (GenCos) and their associated Gas Companies following the successful issuance and signing of the ₦728.979 billion Series 2 Bonds under the ₦4 trillion Power Sector Multi-Instrument Issuance Programme.
NBET’s Managing Director/CEO, Akin Odeyemi, disclosed the development in a statement on Friday.
For more than a decade, Nigeria’s power sector has run on promises. Generation Companies (GenCos) produce electricity and sell it to the NBET, which in turn sells to distribution companies.
The trouble is that the money rarely flowed back up the chain. Distribution companies collected less than they billed, NBET received less than it owed, and GenCos and their gas suppliers were left holding unpaid invoices that grew into trillions of naira.
Now NBET says it has begun paying. Following the signing of the ₦728.979 billion Series 2 Bonds under a ₦4 trillion Power Sector Multi-Instrument Issuance Programme, settlement has started, split between ₦402 billion in cash bonds and ₦326.979 billion in non-cash bonds.
Odeyemi, described it as a milestone under President Tinubu’s Debt Reduction Programme. It is a real step, but the story behind the headline is more complicated.
Nearly half of this settlement, ₦326.979 billion, comes as non-cash bonds. A GenCo cannot buy turbine parts, pay engineers or settle gas bills with a bond that cannot be easily spent.
Even the cash bonds are instruments that must be serviced and redeemed over time. For companies that have waited years, being paid partly in paper is progress, but it does not instantly restore liquidity.
The debt exists because the market’s basic cash flow is broken. Tariffs have long been set below the true cost of supply, and subsidies have accumulated into unpaid bills. Distribution companies lose revenue to theft, poor metering and billing gaps. Clearing legacy debt does not fix any of this.
Unless the market starts paying in full and on time, new arrears will build up and the sector could face the same problem again.
NBET itself speaks of a pathway toward a more sustainable cash-flow framework, which quietly admits that the framework is not yet in place.
Bonds do not erase obligations. They move them. The cost of servicing ₦4 trillion in instruments will eventually land on the government, and by extension on taxpayers and electricity consumers.
If repayment depends on a market that still collects poorly, the burden may simply be pushed into the future.
Gas suppliers and generators have invested in a sector that repeatedly failed to pay them. Investors will judge this programme less by the announcement than by what happens next: whether the second phase starts on schedule, whether payments are transparent, and whether new invoices are honored promptly.
Odeyemi, says the focus is now on preparing the second phase, which means much of the debt remains unresolved.
The statement suggests that healthier GenCos will maintain their plants and raise output, making supply more reliable. That is plausible, but it is not automatic. Generation is only one part of the chain.
Transmission bottlenecks, weak distribution networks and gas supply problems can still leave homes and businesses in the dark even when power plants are paid. Many Nigerians who rely on generators will not notice a change simply because a bond was signed.
The settlement is a meaningful reset that gives GenCos and gas companies some relief after years of waiting. But it is a beginning, not a cure.
The real test is whether the sector can build a system where electricity is billed accurately, paid for in full and delivered reliably, so that no further bailout is ever needed.
Until then, the story of Nigeria’s power sector remains one of progress that must be proven on the ground, one hour of steady supply at a time.
