⚡ Federal Government Seals ₦4 Trillion Power Sector Debt Reduction Deal — A Bold Step Toward Financial Stability and Reliable Electricity
The Federal Government of Nigeria has finalised the implementation framework for the ₦4 trillion Presidential Power Sector Debt Reduction Plan, a landmark initiative designed to restore financial stability and investor confidence in the country’s electricity market.
This marks the most significant financial intervention in the Nigerian power sector in more than a decade — a move aimed at resolving the long-standing liquidity crisis that has hindered power generation, transmission, and distribution efficiency across the nation.
What the Plan Entails
Approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan authorises the issuance of government-backed bonds to clear verified debts owed to Generation Companies (GenCos) and gas suppliers.
These debts—estimated at over ₦4 trillion—have accumulated over the years due to shortfalls in electricity payments, non-cost-reflective tariffs, and systemic inefficiencies.
A high-level meeting on October 7, 2025, in Abuja, brought together the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Chief Bayo Adelabu; and the Special Adviser to the President on Energy, Mrs. Olu Verheijen, alongside senior GenCo executives.
At the meeting, parties agreed on a framework for bilateral negotiations that balances fiscal realities with the financial needs of GenCos, ensuring a fair and sustainable settlement process.
⚙️ Why This Move Matters
According to Senan Murray, Head of Media and Communications in the Office of the Special Adviser to the President on Energy, the plan is designed to clear long-standing arrears that have:
• Crippled new investments in the sector,
• Weakened utility balance sheets, and
• Constrained reliable electricity delivery to consumers nationwide.
The initiative, therefore, represents not just a financial fix, but a structural reform aimed at repositioning the power sector for growth and sustainability.
️ Industry Leaders React
Top industry figures have described the move as transformative:
• Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, praised the government’s resolve, calling it “a credible and systematic effort to tackle the root liquidity challenges in the power sector.”
• Kola Adesina, Group Managing Director of Sahara Group, also hailed the plan as “significant in every respect”, noting that it “gives renewed confidence in the reform process and signals government seriousness in building a sustainable power sector.”
A Broader Vision for the Power Sector
Special Adviser Olu Verheijen highlighted that the Tinubu administration’s focus goes beyond short-term interventions. The broader vision includes:
• Modernising the national grid,
• Scaling embedded generation and renewable energy,
• Closing metering gaps,
• Aligning tariffs with efficient costs,
• Improving subsidy targeting to protect vulnerable households, and
• Restoring regulatory trust to attract large-scale private capital.
She noted that the goal is to shift Nigeria from “crisis response to sustained power delivery.
Reform Beyond Liquidity
Finance Minister Wale Edun emphasised that the plan represents more than just a financial bailout:
“These reforms go beyond liquidity. 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 Big Picture
The Presidential Power Sector Debt Reduction Plan complements other ongoing efforts — such as expanding renewable energy, leveraging domestic gas as a transition fuel, and strengthening local technical capacity.
Jointly implemented by the Federal Ministry of Finance, Federal Ministry of Power, Office of the Special Adviser to the President on Energy, and the Nigerian Bulk Electricity Trading (NBET) Plc, the initiative is expected to:
• Unlock investment in power infrastructure,
• Restore investor confidence,
• Modernise Nigeria’s electricity grid, and
• Drive inclusive, sustainable economic growth across the country.
The Federal Government of Nigeria has finalised the implementation framework for the ₦4 trillion Presidential Power Sector Debt Reduction Plan, a landmark initiative designed to restore financial stability and investor confidence in the country’s electricity market.
This marks the most significant financial intervention in the Nigerian power sector in more than a decade — a move aimed at resolving the long-standing liquidity crisis that has hindered power generation, transmission, and distribution efficiency across the nation.
What the Plan Entails
Approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan authorises the issuance of government-backed bonds to clear verified debts owed to Generation Companies (GenCos) and gas suppliers.
These debts—estimated at over ₦4 trillion—have accumulated over the years due to shortfalls in electricity payments, non-cost-reflective tariffs, and systemic inefficiencies.
A high-level meeting on October 7, 2025, in Abuja, brought together the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Chief Bayo Adelabu; and the Special Adviser to the President on Energy, Mrs. Olu Verheijen, alongside senior GenCo executives.
At the meeting, parties agreed on a framework for bilateral negotiations that balances fiscal realities with the financial needs of GenCos, ensuring a fair and sustainable settlement process.
⚙️ Why This Move Matters
According to Senan Murray, Head of Media and Communications in the Office of the Special Adviser to the President on Energy, the plan is designed to clear long-standing arrears that have:
• Crippled new investments in the sector,
• Weakened utility balance sheets, and
• Constrained reliable electricity delivery to consumers nationwide.
The initiative, therefore, represents not just a financial fix, but a structural reform aimed at repositioning the power sector for growth and sustainability.
️ Industry Leaders React
Top industry figures have described the move as transformative:
• Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, praised the government’s resolve, calling it “a credible and systematic effort to tackle the root liquidity challenges in the power sector.”
• Kola Adesina, Group Managing Director of Sahara Group, also hailed the plan as “significant in every respect”, noting that it “gives renewed confidence in the reform process and signals government seriousness in building a sustainable power sector.”
A Broader Vision for the Power Sector
Special Adviser Olu Verheijen highlighted that the Tinubu administration’s focus goes beyond short-term interventions. The broader vision includes:
• Modernising the national grid,
• Scaling embedded generation and renewable energy,
• Closing metering gaps,
• Aligning tariffs with efficient costs,
• Improving subsidy targeting to protect vulnerable households, and
• Restoring regulatory trust to attract large-scale private capital.
She noted that the goal is to shift Nigeria from “crisis response to sustained power delivery.
Reform Beyond Liquidity
Finance Minister Wale Edun emphasised that the plan represents more than just a financial bailout:
“These reforms go beyond liquidity. 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 Big Picture
The Presidential Power Sector Debt Reduction Plan complements other ongoing efforts — such as expanding renewable energy, leveraging domestic gas as a transition fuel, and strengthening local technical capacity.
Jointly implemented by the Federal Ministry of Finance, Federal Ministry of Power, Office of the Special Adviser to the President on Energy, and the Nigerian Bulk Electricity Trading (NBET) Plc, the initiative is expected to:
• Unlock investment in power infrastructure,
• Restore investor confidence,
• Modernise Nigeria’s electricity grid, and
• Drive inclusive, sustainable economic growth across the country.