Nigerian government has disclosed that it is pushing ahead with the second tranche of about N729 billion bond issue to settle part of the power sector’s legacy debt to Electricity Generation Companies (GenCos).

The Nigerian Bulk Electricity Trading Plc (NBET) confirmed the move in concurrence to an earlier disclosure by the Minister of Power, Joseph Tegbe, who had said that the second tranche would commence in July 2026.

The latest development follows allegation by the GenCos group under the auspices of the Association of Power Generation Companies (APGC), which had accused the government of excluding them from the design of the bond programme and forcing terms on member firms.

Acting Chief Financial Officer (CFO) of NBET, Emily Yenvel, who disclosed the progress being made towards the second tranche of about N729 billion, said the government ‘is progressing arrangements for the second tranche of approximately N701 billion in line with the presidential approval.’

According to Yenvel, the proceeds will be deployed towards eligible beneficiaries in accordance with executed Settlement Agreements and applicable transaction requirements.

Yenvel said the settlement is being implemented under the Presidential Power Sector Debt Reduction Programme (PPSDRP) through the Presidential Power Sector Debt Reduction Committee (PPSDRC) of which NBET is a member.

She explained that the N501 billion Series I issuance was the first tranche of the approved programme, adding that payments under this tranche were being implemented in accordance with the approved framework, executed settlement agreements and applicable transaction requirements.

“Therefore, comparing a beneficiary’s total verified legacy debt with the amount received under the first tranche does not reflect the overall programme, as verified entitlements are being settled over successive phases,” she said.

The NBET CFO also clarified that the APGC was not part of the settlement negotiations and as it is not a contractual party to the individual Settlement Agreements.

Accordingly, she said NBET’s role was limited to implementing the executed agreements with the respective GenCos and the approved implementation framework.

Oracle Intelligence recalls that the dispute between the government and the generation companies snowballed, two weeks ago when the latter revealed that it has rejected a planned resettlement option advanced by the federal government as they insist on recovering their money, said to have reached N7 trillion.

The GenCos also called on government to declare a state of emergency in the country’s power sector to stem growing decline and mounting debts stifling operations.

Making the disclosure, penultimate Monday, during the virtual opening session of the three-day “Powering Nigeria’s Power Sector Leaders Training Series 2026 – Professional Track, the Executive Secretary and Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, further warned that the mounting liabilities threaten the sustainability of electricity generation and the stability of the nation’s power sector.

According to her, after the federal government’s verified claims of the N3.3 trillion, the debt later rose to N3.8 trillion just before the appointment of the Special Adviser on Power, Mr Rilwan Lanre Babalola.

Continuing, Dr. Ogaji stated that as of now the debts have now surged to nearly N7 trillion as unpaid invoices continue to accumulate.

Also, the gas suppliers had reportedly rejected the Federal Government’s proposal for a 50 per cent debt write-off.

Federal government had earlier approved a N3.3 trillion financial settlement plan to clear legacy debts accumulated within the Nigerian Electricity Supply Industry (NESI) between 2015 and early 2025.

Under the arrangement, outstanding obligations to GenCos were to be settled through a combination of 10-year promissory notes and proceeds from a N501.02bn bond issued through the Nigerian Bulk Electricity Trading (NBET) Plc.

The bond issuance marked the first phase of efforts to reduce the huge market shortfalls that have constrained investments across the power sector.

However, disagreements over the reconciliation of claims between the government and GenCos have slowed implementation of the settlement framework, with industry operators insisting that the verified liabilities are significantly higher than the figures proposed by the government.

Ogaji revealed that till date GenCos have yet to receive any fresh payment despite repeated assurances by the Federal Government, just as she disclosed that government has also not completed the disbursement of the N500 billion raised through the bond market in December to offset part of the outstanding obligations owed to GenCos.

According to her, GenCos never agreed to forfeit half of the debt owed to them.

“To date, we have not received any payment. We have not accepted the N3.3tn settlement proposal,” she said.

Ogaji said, on their part, attempts to persuade gas suppliers to accept a 50 per cent reduction in the debts failed.

“When we told the gas suppliers that the Federal Government had agreed to take 50 per cent off the debts, the gas suppliers refused and told us that we are on our own,” she stated.

Ogaji, however, urged the newly appointed Minister of Power, Mr Joseph Tegbe, to demonstrate strong political will and declare a state of emergency in the power sector.

She also urged the minister to implement urgent reforms to halt the continuous accumulation of debts owed to generation companies.

According to her, the government must establish a sustainable payment framework that prevents fresh debts from piling up.

“His priority should be to stop the continuous growth of the debt profile while addressing the existing obligations,” she said.