NBET begins settlement of N729bn owed to GenCos and gas suppliers

The Nigerian Bulk Electricity Trading Plc (NBET) has begun settling outstanding debts to participating electricity generation companies (GenCos) and associated gas suppliers, according to multiple industry reports.

Two outlets, Punch and Nairametrics, say NBET has commenced payment of N729 billion owed to GenCos and gas suppliers. Punch reported the settlement is being effected through a bond issuance. Nairametrics likewise reported the N729 billion figure and described the payments as a commencement of settlement for outstanding obligations to GenCos and their gas suppliers.

A separate report from BusinessDay said NBET has started disbursing funds to participating GenCos and gas suppliers but gave a larger figure for the overall debt stock, saying the indebtedness stands at N4 trillion. That larger total was only reported by BusinessDay and is not corroborated by the other two outlets.

Details of the bond issuance and timetable

Punch specifically noted that the N729 billion settlement is being implemented through a bond issuance, but the outlets did not provide further details on the bond’s tenor, pricing, or the schedule for disbursements. Nairametrics also reported the commencement of the N729 billion payments but did not outline the mechanics beyond the settlement starting.

BusinessDay’s report that NBET has begun disbursing funds did not specify how its N4 trillion estimate relates to the N729 billion being settled or whether the larger figure reflects cumulative arrears across multiple counterparties or contract periods. The three reports do agree, however, that GenCos and their associated gas suppliers are the intended recipients of the payments.

Why the move matters

The repayments target long-standing sums that NBET owes to power generators and gas suppliers. By initiating payment, NBET is taking an operational step to reduce those outstanding liabilities to market participants. Punch’s reporting that a bond is being used indicates the authority is employing market financing to meet at least part of the obligations.

Still, reporting differs on the full scale of NBET’s liabilities. The N729 billion figure for the current settlement is supported by two outlets; the N4 trillion total cited by BusinessDay has not been confirmed elsewhere in the reports reviewed.

What remains unclear

The reports do not provide a comprehensive breakdown of which GenCos or gas suppliers will receive payments, the exact schedule for remaining repayments, nor confirm whether additional bond issuances or other financing mechanisms will follow. They also do not include official statements from NBET or government ministries clarifying the total stock of arrears or the plan to resolve them in full.

As NBET proceeds with the N729 billion settlement described by Punch and Nairametrics, market participants and stakeholders will likely look for further disclosures on the total liabilities, the terms of the bond issuance, and a timeline for completing remaining payments.