The Federal Government on Tuesday took a major step toward restoring financial stability and investor confidence in Nigeria’s electricity market with the finalisation of the implementation framework for the Presidential Power Sector Debt Reduction Plan.
According to a statement from the Office of the Special Adviser to the President on Energy, Olu Verheijen, the initiative approved by President Bola Ahmed Tinubu is a landmark effort to address structural bottlenecks in the power sector and pave the way for large-scale private investment and sustainable economic growth.
The statement recalled that on October 7, 2025, 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, Olu Verheijen, met with senior executives of Nigeria’s power generation companies (Gencos) in Abuja to review settlement modalities for outstanding debts.
The meeting concluded with an agreement to begin bilateral negotiations aimed at finalising settlement terms that balance fiscal realities with the financial challenges facing Gencos.
Approved by President Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan authorises the issuance of up to ₦4 trillion in government-backed bonds to clear verified arrears owed to generation companies and gas suppliers.
Described as the largest intervention in over a decade, the plan seeks to resolve the sector’s longstanding debt overhang, which has constrained investment, weakened utility balance sheets, and impeded reliable power delivery nationwide.
Chairman of Heirs Holdings and Transcorp Power, Mr. Tony Elumelu, hailed the move as a “credible and systematic effort” by the government to address the root liquidity crisis in the power sector.
“We commend President Tinubu and his economic team for this bold and transformative step,” Elumelu said.
Similarly, Group Managing Director of Sahara Group, Mr. Kola Adesina, said the initiative renews industry confidence in the ongoing reforms.
“It sends a clear signal that the government is serious about building a sustainable power sector,” he noted.
Verheijen described the debt reduction plan as a strategic reset for Nigeria’s electricity market. By restoring the financial health of power companies, she said, the government aims to attract fresh investments, expand generation capacity, modernise grid infrastructure, and improve electricity reliability for homes and industries.
“Our focus is on creating the right conditions for investment — from modernising the grid and scaling embedded generation to improving metering and tariff alignment,” she explained. “We are moving from crisis management to sustained delivery and building the confidence needed to attract large-scale private capital.”
Finance Minister Wale Edun added that the reforms would strengthen the fundamentals of the power sector and transform reliable electricity into a driver of national growth.
“These reforms go beyond liquidity. They are about rebuilding the fundamentals so Nigeria’s power sector works for investors, citizens, and the next generation,” Edun said.
Complementary measures, according to the statement, include scaling renewable energy, leveraging domestic gas as a transition fuel, and building local technical capacity all aimed at achieving energy security and sovereignty while positioning Nigeria as one of Africa’s most attractive power markets.
The Presidential Power Sector Debt Reduction Plan is being 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.
