FG, GENCOS STRIKE N4TRN DEAL TO SETTLE POWER SECTOR DEBTS
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The Federal Government has forged a consensus with electricity generation firms regarding the execution framework for the Presidential Power Sector Debt Reduction Plan, a N4 trillion initiative sanctioned by President Bola Tinubu aimed at stabilizing Nigeria’s electricity market and reinstating investor trust.
This accord emerged following a high-level conference held in Abuja on October 7, 2025, involving the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Bayo Adelabu; and the President’s Special Adviser on Energy, Olu Verheijen, together with senior leaders from the nation’s generation enterprises.
Verheijen disclosed this in a communiqué she issued on Tuesday titled ‘FG, GenCos Conclude Implementation Framework for N4 trillion Presidential Power Sector Debt Reduction Plan. ’
The gathering culminated in an agreement on approaches for resolving outstanding liabilities, encompassing bilateral discussions to finalize “comprehensive and conclusive settlement agreements” that reconcile fiscal realities with the financial limitations faced by the generation companies, she remarked.
Ratified by the Federal Executive Council in August, the initiative permits the issuance of up to N4 trillion in government-supported bonds to settle verified dues owed to generation firms and gas suppliers, representing the most substantial intervention in the sector in over a decade.
This action aims to address a legacy debt burden that has hindered investment and undermined the financial stability of principal stakeholders.
“For the first time in years, we are witnessing a credible and organized endeavor by the government to confront the fundamental liquidity issues in the electricity sector,” the statement attributed to Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, indicated.
“We applaud President Tinubu and his economic team for this courageous and transformative move,” he added.
Kola Adesina, Group Managing Director of Sahara Group, remarked, “This initiative is pivotal in every aspect.
“It instills renewed confidence in the reform process and sends a clear message that the government is earnest about cultivating a sustainable power sector. ”
The Presidency conveyed that the debt initiative signifies a reset of Nigeria’s electricity market.
By rejuvenating the financial well-being of power firms, it is anticipated to unlock new investments in generation capacity, modernize grid infrastructure, and enhance electricity distribution to households and industries.
Verheijen elucidated, “Our emphasis is on establishing the appropriate conditions for investment, ranging from modernizing the grid and enhancing distribution to scaling embedded generation.
“By addressing metering discrepancies, aligning tariffs with efficient costs, refining subsidy targeting to assist the disadvantaged, and reinstating regulatory confidence, we are transitioning from crisis management to sustained service delivery. ”
In his remarks, Edun asserted that the reforms extend beyond mere liquidity control.
“They are about reconstructing the fundamentals to ensure that Nigeria’s power sector operates effectively for investors, citizens, and future generations,” he articulated.
As per Verheijen, supplementary initiatives to expand renewable energy, utilize domestic gas as a transitional fuel, and bolster local technical expertise are expected to position Nigeria for enhanced energy security and long-term autonomy, according to officials.
The Presidential Power Sector Debt Reduction Initiative is being executed collaboratively by the Federal Ministries of Finance and Power, alongside the Office of the Special Adviser to the President on Energy, in partnership with the Nigerian Bulk Electricity Trading Plc and additional stakeholders.
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