FG settles N333bn GenCos debt, pays first bond coupon

The Federal Government of Nigeria has settled N333 billion (approximately $360 million) of debt owed to electricity generation companies (GenCos) and paid the first coupon on a bond issued to address the sector's liquidity crisis. This action is part of a broader effort to restore investor confidence in Nigeria's struggling power sector, which has been plagued by chronic underfunding, gas supply shortages, and transmission bottlenecks. The debt settlement covers outstanding payments for electricity generated and supplied to the national grid. The payment of the first bond coupon signals the government's commitment to honoring its financial obligations under the bond program. The move is expected to improve cash flow for GenCos, enabling them to invest in maintenance and fuel supply, and potentially attract private investment into the sector. The announcement was made by the Minister of Power, who emphasized the government's dedication to stabilizing the power value chain.

Global Impact

Economically, the settlement improves Nigeria's fiscal credibility and could lower borrowing costs for the power sector, but the impact is largely domestic. Politically, it strengthens the government's narrative of reform and may boost investor sentiment toward Nigerian infrastructure assets.