The Federal Government has finalized the implementation framework for the Presidential Power Sector Debt Reduction Plan, a bold intervention designed to stabilize Nigeria’s electricity market, restore investor confidence, and attract large-scale private investment into the sector.
Approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan authorizes the issuance of up to ₦4 trillion in government-backed bonds to settle verified arrears owed to electricity generation companies (GenCos) and gas suppliers — the largest such intervention in more than a decade.
The framework was concluded following a high-level meeting held on Tuesday, October 7, 2025, in Abuja, between 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, with senior executives of Nigeria’s GenCos in attendance.
According to a statement, the meeting reached a consensus on settlement modalities, which will include bilateral negotiations to finalize full and final payment agreements that balance fiscal realities with the financial constraints facing power generation firms.
“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.”
Similarly, Mr. Kola Adesina, Group Managing Director of Sahara Group, described the initiative as “significant in every respect,” adding that it provides renewed confidence in the reform process and sends a clear signal that the government is committed to building a sustainable power industry.
The debt reduction plan is expected to restore the financial health of power companies, enabling new investment in generation capacity, modernization of grid infrastructure, and improved electricity supply to homes and businesses. It also aims to lay a stronger foundation for industrialization, job creation, and inclusive economic growth.
“Our focus is on creating the right conditions for investment—from modernizing the grid and improving distribution to scaling embedded generation,” said Mrs. Verheijen. “By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting, and restoring regulatory trust, we are shifting from crisis response to sustained delivery.”
Mr. Edun emphasized that the reforms go beyond liquidity challenges. “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 environment for sustained private investment and make reliable power a catalyst for economic growth,” he said.
The government added that complementary efforts are underway to expand renewable energy, leverage domestic gas as a transition fuel, and build local technical capacity, positioning Nigeria not only for energy security but also for energy sovereignty and a more competitive power market across Africa.
