Federal Government, GenCos Seal Framework For ₦4tn Power Sector Debt Repayment Plan

The Federal Government and electricity generation companies (GenCos) have finalised the implementation framework for the ₦4trillion Presidential Power Sector Debt Reduction Plan — a landmark initiative approved by President Bola Tinubu to restore financial stability, unlock private investment, and ensure reliable power supply across Nigeria.

The framework, concluded at a meeting held in Abuja on October 7, 2025, brings together the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun; the Minister of Power, Chief Bayo Adelabu, and the Special Adviser to the President on Energy, Mrs. Olu Verheijen, alongside senior executives of Nigeria’s GenCos.

The high-level meeting reviewed modalities for settling long-standing debts owed to power generation companies and gas suppliers, reaching a consensus on bilateral negotiations to finalise full and final settlement agreements that align fiscal realities with the financial obligations of the GenCos.

Approved by President Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the ₦4 trillion plan authorises the issuance of government-backed bonds to clear verified arrears in the power sector.

It marks the single largest intervention in more than a decade aimed at resolving liquidity challenges that have weakened utility balance sheets, discouraged investors, and undermined reliable electricity delivery nationwide.

“For the first time in years, we are seeing a credible and systematic effort by government to tackle the root liquidity challenges in the power sector,” said Mr. Tony Elumelu, chairman of Heirs Holdings and Transcorp Power. “We commend President Tinubu and his economic team for this bold and transformative step.”

Echoing the same sentiment, Group Managing Director of Sahara Group, Mr. Kola Adesina, said: “This initiative is significant in every respect. It gives us renewed confidence in the reform process and a clear signal that the government is serious about building a sustainable power sector.”

According to officials, the Presidential Debt Reduction Plan goes beyond debt clearance. It represents a strategic reset of Nigeria’s electricity market by restoring the financial health of GenCos and gas suppliers, enabling new investments in generation capacity, modernising transmission and distribution networks, and ensuring more reliable power supply to homes and industries.

Mrs. Olu Verheijen, the Special Adviser to the President on Energy, explained that the administration’s focus was on building the right environment for sustained private-sector-led growth.

“Our focus is on creating the right conditions for investment — from modernising the grid and improving distribution to scaling embedded generation,” she said. “By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting for the poor and vulnerable, and restoring regulatory trust, we are moving from crisis management to sustainable delivery.”

Minister of Finance, Mr. Edun, emphasised that the reforms underpinning the plan are designed to build a self-sustaining energy market that benefits both citizens and investors.

“These reforms go beyond liquidity,” he stated. “They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation. This is how we create the enabling conditions for sustained private investment and transform reliable power into a catalyst for economic growth.”

The initiative also complements the government’s broader agenda to diversify energy sources, expand renewable generation, and leverage domestic gas as a transition fuel. Officials say these efforts will enhance energy security, reduce import dependence, and position Nigeria as one of Africa’s most attractive power markets.

The Presidential Power Sector Debt Reduction Plan is jointly implemented by the Federal Ministry of Finance, the Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, in collaboration with the Nigerian Bulk Electricity Trading (NBET) Plc and other key stakeholders.