October 15, (THEWILL) — The Federal Government has finalised implementation frameworks for a N4 trillion government-backed bond programme aimed at clearing verified arrears owed to power Generation Companies (GenCos) and gas suppliers.
Special Adviser to the President on Energy, Mrs. Olu Verheijen, disclosed this after a high-level meeting in Abuja attended by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Bayo Adelabu; and senior executives of GenCos.
According to Verheijen, the meeting produced a consensus to begin bilateral negotiations to finalise settlement terms for the verified debts owed to GenCos and gas suppliers.
The Presidential Power Sector Debt Reduction Plan, jointly implemented by the Federal Ministry of Finance, the Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, is being executed in collaboration with the Nigerian Bulk Electricity Trading (NBET) Plc and other key stakeholders.
Approved by the Federal Executive Council (FEC) in August 2025, the initiative authorises the issuance of government-backed bonds worth up to N4 trillion to clear legacy arrears that have stifled investment, weakened utilities’ balance sheets, and hindered stable electricity supply for years.
Verheijen said the government’s focus is on restoring investor confidence by modernising the grid, improving distribution, expanding embedded generation, closing metering gaps, and aligning tariffs with efficient costs while ensuring targeted subsidies for the poor and vulnerable.
“The meeting concluded with a consensus on the way forward, which includes bilateral negotiations to finalise full and final settlement agreements that balance fiscal realities with the financial constraints of the GenCos,” she stated.
“This 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 across the country. It represents a major step toward restoring financial stability and investor confidence in the electricity market.”
Verheijen added that the sector is now shifting from “crisis response to sustained delivery,” building the confidence needed to attract large-scale private capital.
Business leaders have hailed the move as a turning point for Nigeria’s struggling power sector.
Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, described it as “a credible and systematic effort to tackle the root liquidity challenges that have long plagued the industry.”
Similarly, Kola Adesina, Group Managing Director of Sahara Power Group, said the initiative “signals renewed confidence in the reform process and reflects the government’s seriousness about building a sustainable energy future.”
Verheijen noted that the debt reduction plan is part of a broader reform agenda to strengthen the entire electricity value chain, from modernising grid infrastructure and closing metering gaps to ensuring tariffs reflect actual costs and that subsidies are targeted effectively.
She said, “We are moving from crisis management to sustained delivery. By restoring the financial health of power companies and rebuilding regulatory trust, we are creating the right conditions for private investment and reliable electricity supply for homes and businesses.”
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