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ABUJA – The Federal Government has agreed to instalmental payment of the N4 trillion debt owed Power Generation Companies (GenCos).
The repayment plan has been endorsed by President Bola Tinubu, a move power sector players see as welcomed development to address structural bottlenecks and lay the groundwork for large-scale private sector-led investment and sustained economic growth.
To this end, 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 the outstanding debt.
The meeting concluded with a consensus on the way forward, which includes conducting bilateral negotiations to finalise 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 authorises the issuance of up to N4 trillion in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers.
This intervention, the largest in over a decade, is expected to address a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country.
“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,” said Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power.
“We commend President Tinubu and his economic team for this bold and transformative step.” Mr. Kola Adesina, Group Managing Director of @iamsaharagroup, echoed this sentiment: “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, it will enable new investment in generation capacity, modernise grid infrastructure, and deliver more reliable electricity to homes and businesses, creating a stronger foundation for industrialisation, job creation, and inclusive economic growth.
“Our focus is on creating the right conditions for investment, from modernising the grid and improving distribution to scaling embedded generation,” said
