Power generation companies have rejected contract offers from the Federal Government requiring them to accept 50 percent of the total sum of debt owed to them for electricity supplied to the national grid.
Described as a 50 percent “haircut”, the proposed contracts were sent out to each power generation company with the exception of Azura Power West Africa.
The government proposed to pay the companies about N2.4 trillion or 49.9 percent of the total debt.
Government debt to the GenCos rose to over N5 trillion at the end of June with President Bola Tinubu agreeing to pay off the debt through bond issuance during a meeting with the companies in July.
Following the approval of the proposal by the Federal Executive Council in August, top government officials met with the owners of the GenCos in early October with the Special Adviser on Energy, Olu Verrheijen announcing that an agreement has been reached with the companies on the debt repayment model.
In furtherance to this, the government on October 16, 2025 sent out two contract documents to the GenCos which amongst other clauses requested them to forfeit 50 percent of the debt owed to them as final payment.
Copies of the documents, sighted by Vanguard, titled “NBET deed of settlement” and “Deed of novation”, amongst other things sort to transfer government debt from the Nigerian Bulk Electricity Trading Plc (NBET) to a new special purpose vehicle named NBET Bond Finance Company Plc.
Contracts read in parts: “GenCo hereby accepts the sum of (“Settlement Amount”) as the full and final settlement of the outstanding Legacy Debt, including any interest thereon and any other claim for losses whether present or future and whether known or unknown in respect of the Legacy Debt.