In a decisive move to resolve the longstanding liquidity crisis crippling Nigeria’s electricity market, the Federal Government and Generation Companies (GenCos) have finalised the implementation framework for a ₦4 trillion power sector debt settlement plan.
The landmark agreement, reached during high-level talks in Abuja, paves the way for the settlement of verified arrears owed to power generators and gas suppliers through the issuance of government-backed bonds. This intervention is the largest of its kind in over a decade and is designed to restore financial stability and investor confidence in the sector.
The meeting, which included the Minister of Finance, Mr. Wale Edun, the Minister of Power, Chief Bayo Adelabu, and the Special Adviser to the President on Energy, Mrs. Olu Verheijen, concluded with a consensus on conducting bilateral negotiations to finalise full and final settlement agreements.
Industry leaders have hailed the move as a critical turning point. Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, stated, “This is the first credible and systematic effort in years to tackle the root liquidity challenges in the power sector. We commend President Tinubu and his economic team for this bold and transformative step.”
Echoing this sentiment, Mr. Kola Adesina, Group Managing Director of Sahara Group, noted, “The significance of this initiative cannot be overstated. It gives us renewed confidence in the reform process and sends a clear signal that the government is serious about building a sustainable power sector.”
Beyond clearing legacy arrears, the plan signals a strategic reset for Nigeria’s electricity market. By restoring the financial health of power companies, the government aims to unlock new investments in generation capacity, modernise grid infrastructure, and ultimately deliver more reliable electricity to homes and businesses.
“Our focus is on creating the right conditions for investment,” said Mrs. Olu Verheijen, Special Adviser to the President on Energy. “By resolving this debt overhang, closing metering gaps, and restoring regulatory trust, we are shifting from crisis response to sustained delivery. This is how we attract the large-scale private capital needed to power our economy.”
The Minister of Finance, Mr. Wale Edun, emphasised the broader economic vision. “These reforms go beyond liquidity,” he said. “They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation. Reliable power is the ultimate catalyst for economic growth.”
The Presidential Power Sector Debt Reduction Plan is being jointly implemented by the Federal Ministries of Finance and Power, and the Office of the Special Adviser to the President on Energy.
Discussion about this post