THE Federal Government has concluded discussions with power generation companies (GenCos) on the framework for implementing the Presidential Power Sector Debt Reduction Plan, a N4 trillion intervention aimed at restoring financial stability and investor confidence in Nigeria’s electricity market.
The initiative, approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council in August 2025, seeks to address long-standing liquidity challenges that have crippled the country’s power sector for over a decade.
According to a statement by the Media and Communications Unit in the Office of the Special Adviser to the President on Energy sent to News Point Nigeria, the plan authorises the issuance of up to N4 trillion in government-backed bonds to settle verified arrears owed to electricity generation companies and gas suppliers.
“The Federal Government has taken a major step toward restoring financial stability and investor confidence in the electricity market with the finalisation of the implementation framework for the Presidential Power Sector Debt Reduction Plan,” the statement read.
The breakthrough was achieved during a high-level meeting held on October 7, 2025, which brought 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 leading GenCos.
The meeting, according to the Presidency, reached a consensus on settlement modalities and agreed to commence bilateral negotiations to finalise full and final settlement agreements that balance fiscal realities with the financial constraints facing the GenCos.
The debt reduction framework, described as the largest single government intervention in the power sector in more than a decade, targets the massive debt overhang that has weakened utility balance sheets, discouraged private investment, and undermined reliable power supply across the country.
Chairman of Heirs Holdings and Transcorp Power, Tony Elumelu, commended President Tinubu’s administration for taking what he called a “credible and systematic step” to address the sector’s long-standing financial bottlenecks.
“For the first time in years, we are seeing a structured and determined approach to tackling the root liquidity challenges in the power sector. This is a bold and transformative move by the Federal Government,” Elumelu said.
Similarly, the Group Managing Director of Sahara Group, Kola Adesina, described the initiative as a turning point for the electricity industry.
“This plan renews investor confidence and signals that the government is genuinely committed to building a sustainable and reliable power sector,” Adesina noted.
The Special Adviser to the President on Energy, Olu Verheijen, explained that the plan was not just about settling debts but also about resetting Nigeria’s power market to attract fresh investments and achieve long-term energy security.
“By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting for the poor, and restoring regulatory trust, we are moving from crisis management to sustainable reform and delivery,” she said.
The Minister of Finance, Wale Edun, also emphasised that the debt clearance framework would rebuild the sector’s fundamentals.
“Reliable electricity is the bedrock of industrial growth. These reforms are about rebuilding trust, ensuring fiscal balance, and creating an environment where investors and citizens alike can thrive,” he said.