In a major move aimed at resolving the nation’s persistent electricity crisis, the Federal Government has approved the issuance of a N4 trillion bond to clear the outstanding debts owed to power generating companies (GenCos) and gas suppliers.
The announcement was made by the Minister of Power, Adebayo Adelabu, at the ongoing Nigeria Energy Summit in Lagos. He stated that President Bola Tinubu has given his approval for the bond, which is intended to settle verified debts that have long crippled the sector’s efficiency and growth.
“This initiative is a critical step towards achieving a stable and reliable power supply for Nigeria,” the Minister said.
Alongside the debt clearance, Adelabu revealed that a targeted subsidy framework is being developed to protect vulnerable households while setting the industry on a sustainable path toward full commercialization.
Sector Commercialization and Performance
The Minister outlined broader efforts to deepen power sector commercialization, highlighting that recent tariff policy reforms have already yielded positive results. He reported that sector revenue has increased by 70 per cent to ₦1.7 trillion in 2024 and is projected to exceed ₦2 trillion in 2025.
However, he acknowledged persistent challenges, particularly with the Distribution Companies (DisCos).
“The sector continues to face challenges of under-capitalization among several DisCos and a severe debt burden,” Adelabu stated. To address this, the government plans to introduce a minimum capital adequacy requirement as part of the license renewal process for the DisCos, aiming to strengthen their financial health.
Infrastructure Development
On infrastructure, the Minister pointed to ongoing national programs designed to modernize and expand the national grid. He noted that under the initial phase of the Presidential Power Initiative (PPI), over 700MW of additional transmission capacity has been achieved, enhancing grid stability and overall system reliability.
This N4 trillion debt clearance is seen as the government’s most significant intervention yet to break the cycle of debt that has plagued the electricity value chain, offering a renewed hope for a functional power sector in Nigeria.
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