GenCos Yet to Receive Funds Three Months After FG’s N501bn Power Sector Bond
- Power generation companies have not received any payments from the federal government
- This is despite the N501bn bond issued by the government to clear about N4tn owed to GenCos
- Industry stakeholders warn that the delay could worsen financial pressure on power operators
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology, and macroeconomic trends in Nigeria.
Three months after the federal government issued a N501bn bond to address longstanding electricity debts, power generation companies in Nigeria are yet to receive any payments, raising fresh concerns about liquidity challenges in the sector.
The development follows the launch of the Presidential Power Sector Debt Reduction Programme, designed to clear about N4tn owed to GenCos for electricity supplied to the national grid over the past decade.
Source: Getty Images
Delay in fund disbursement
The PUNCH reported that although five generation companies signed settlement agreements under the programme in January 2026, no funds had been disbursed to beneficiaries as of Sunday.
The Executive Secretary of the Association of Power Generation Companies (APGC), Joy Ogaji, confirmed the delay, stating that operators are still awaiting payment.
She said inquiries made from assignees showed that no funds had been received, highlighting growing concerns within the Nigerian Electricity Supply Industry over persistent cash flow challenges.
FG issues N501bn bond
The Federal Government had issued the N501bn bond in December 2025 in Lagos as part of efforts to stabilise the power sector.
Officials said the bond, which recorded full subscription, attracted investments from pension funds, banks, and asset managers, signalling renewed investor confidence in ongoing reforms.
The Special Adviser to the President on Energy, Olu Verheijen, described the initiative as a key step toward resetting the electricity market and addressing legacy debts.
Five GenCos sign agreements
According to the government, the first phase of the programme involved five companies operating 14 power plants: First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited (NDPHC).
The settlement agreements were executed with the Nigerian Bulk Electricity Trading Plc, with a total negotiated value of N827.16bn to be paid in four instalments.
However, the delay in disbursement has raised questions about the pace of implementation of the programme.
Sector faces mounting pressure
Industry stakeholders warn that continued delays could worsen financial strain on GenCos, many of which are already dealing with high operating costs, foreign exchange volatility, and gas supply constraints.
Operators have repeatedly raised concerns that unpaid invoices have weakened their financial position, limited maintenance capacity, and discouraged new investments.
The estimated N4tn debt, linked to tariff shortfalls and market inefficiencies, remains a major challenge across Nigeria’s electricity value chain.
Source: Getty Images
Concerns over reform implementation
Despite the government’s commitment to clear the backlog through bonds and structured payments, the absence of actual fund disbursement is fuelling uncertainty within the sector.
Efforts to obtain an official response from the Presidency on the delay were unsuccessful as of the time of filing this report.
Analysts say the situation highlights ongoing structural issues in Nigeria’s power sector, even as reforms are introduced to improve long-term sustainability and service delivery.
Gas suppliers threaten action over N3.3tn debt
Legit.ng earlier reported that gas suppliers threatened to halt supply to thermal power plants over debts owed to them by the federal government, estimated at N3.3 trillion.
Nigeria has faced frequent power outages in recent months, with many households and businesses experiencing prolonged blackouts since the beginning of the year.
Nigeria’s electricity generation has fallen below 4,000 megawatts due to reduced gas supply. Industry experts warn that continued gas shortages could worsen Nigeria’s ongoing electricity crisis.
Source: Legit.ng
