The Nigerian Bulk Electricity Trading (NBET) confirmed on Friday that it had commenced the payment of legacy debts owed to participating Generation Companies (GenCos) and their associated gas suppliers under the Presidential Power Sector Debt Reduction Programme, the company
The NBET Managing Director, Mr Akin Odeyemi, who made this disclosure, indicated that the payments followed the successful issuance and signing of N728.979 billion Series 2 Bonds under the N4 trillion Power Sector Multi-Instrument Issuance Programme of the Federal Government.
Describing the latest payment to the DisCos as a major step in implementing the debt reduction programme under the present administration, the NBET boss, maintained that the move also aligned with the objectives of the President Bola Tinubu-led administration’s Renewed Hope Agenda.
Specifically, he disclosed that the legacy debt payment to the DisCos comprised N402 billion in Cash Bonds and N326.979 billion in Non-Cash Bonds, in line with the approved settlement framework.
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Odeyemi expressed optimism that the new payment would help address lingering financial obligations of the government to the DisCos and improve liquidity across the electricity value chain.
He further clarified: “Beyond addressing legacy obligations, this development provides a pathway for the Nigerian electricity market to progressively transition toward a more sustainable market cash-flow framework.”
According to him, the planned transition would be characterised by improved payment discipline, stronger liquidity and greater commercial certainty to support continued investment across the value chain as more financially stable generation segment of the value chain would strengthen the GenCos’ capacity to maintain and improve their power generation assets.
In addition, Odeyemi said improved financial stability would also support increased electricity generation and enhance reliability across the Nigerian electricity market, pointing out that off-setting the legacy debts will lay the foundation for a financially sustainable, commercially viable and investment-driven electricity market in the country.
This is even as he hinted that the NBET was also undertaking preparatory activities for the commencement of the programme’s second phase and achieving the objectives of the government’s N4 trillion Power Sector Multi-Instrument Issuance Programme.
