Lawrence Olaoye 
The Federal Government has finalized the implementation framework for the ₦4 trillion Presidential Power Sector Debt Reduction Plan, a landmark initiative aimed at restoring financial stability and investor confidence in Nigeria’s electricity market.
According to a release by Senan Murray of the Media and Communications Unit, Office of the Special Adviser to the President on Energy, the plan was approved by President Bola Tinubu to address structural bottlenecks and lay the foundation for large-scale, private sector-led investment and sustained economic growth.
On Tuesday, 7 October 2025, in Abuja, 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, met with senior executives of Nigeria’s electricity generation companies (GenCos) to review settlement modalities for outstanding debt. The meeting concluded with a consensus to conduct bilateral negotiations to finalize full and final settlement agreements that balance fiscal realities with the financial constraints of the GenCos.
Approved by President Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan authorizes the issuance of up to ₦4 trillion in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers. The intervention, the largest in over a decade, addresses a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery nationwide.
Commenting on the initiative, Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, said: “For the first time in years, we are seeing a credible and systematic effort by government to tackle the root liquidity challenges in the power sector. We commend President Tinubu and his economic team for this bold and transformative step.”
Similarly, Mr. Kola Adesina, Group Managing Director of Sahara Group, stated: “This initiative is significant in every respect. It gives us renewed confidence in the reform process and a clear signal that the government is serious about building a sustainable power sector.”
Beyond clearing arrears, the debt reduction plan signals a strategic reset of Nigeria’s electricity market. By restoring the financial health of power companies, the plan will enable new investment in generation capacity, modernize grid infrastructure, and deliver more reliable electricity to homes and businesses, creating a stronger foundation for industrialization, job creation, and inclusive economic growth.
“Our focus is on creating the right conditions for investment, from modernizing the grid and improving distribution to scaling embedded generation,” said Mrs. Olu Verheijen, Special Adviser to the President on Energy.
“By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting for the poor and vulnerable, and restoring regulatory trust, we are shifting from crisis response to sustained delivery and building the confidence needed to attract large-scale private capital,” she added.
Mr. Wale Edun emphasized: “These reforms go beyond liquidity. They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, citizens, and future generations. This is how we create the enabling conditions for sustained private investment and transform reliable power into a catalyst for economic growth.”
Complementary efforts to scale renewable energy, leverage domestic gas as a transition fuel, and build local technical and institutional capacity are expected to position Nigeria for not just energy security, but energy sovereignty, making it 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 Ministry of Power, and the Presidential Energy Office, in close collaboration with GenCos and gas suppliers.
