The federal government of has finalized the implementation framework for the ₦4 trillion Presidential Power Sector Debt Reduction Plan, a major initiative approved by President Bola Ahmed Tinubu to restore financial stability and investor confidence in the nation’s electricity market.
The framework, concluded on October 7, 2025, in Abuja, followed a high-level meeting between 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, alongside senior executives of Nigeria’s electricity generation companies (GenCos).
During the meeting, both parties reached a consensus on the settlement modalities for the long-standing debt owed to generation companies and gas suppliers. The plan includes bilateral negotiations to finalize full and final settlement agreements that balance government fiscal realities with the operational needs of the GenCos.
Approved by President Tinubu and ratified by the Federal Executive Council (FEC) in August 2025, the initiative authorizes the issuance of government-backed bonds worth up to ₦4 trillion to offset verified arrears. This marks the most significant intervention in the power sector in over a decade, targeting the liquidity constraints that have weakened the industry and impeded reliable power supply nationwide.
Business leaders welcomed the move as a decisive step toward restoring investor trust. Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, described it as “a credible and systematic effort to tackle the root liquidity challenges in the power sector.”
Similarly, Mr. Kola Adesina, Group Managing Director of Sahara Group, commended the initiative for “signaling renewed confidence in the reform process and reaffirming the government’s commitment to building a sustainable power sector.”
The debt reduction plan forms part of a broader strategy to reset Nigeria’s electricity market. By stabilizing the financial health of power companies, the government aims to unlock new private sector investment, modernize grid infrastructure, and improve electricity delivery to homes and industries — a critical enabler of industrialization and job creation.
“Our focus is on creating the right conditions for investment — from modernizing the grid and improving distribution to closing metering gaps and ensuring fair tariff alignment,” said Mrs. Olu Verheijen, Special Adviser to the President on Energy. “We are shifting from crisis management to sustained delivery, building the confidence needed to attract large-scale private capital.”
Finance Minister Wale Edun emphasized that the reforms were not only about clearing debts but about rebuilding the fundamentals of the sector.
“This is how we create the conditions for sustained private investment and make reliable power a true driver of economic growth,” he stated.
The Tinubu administration also highlighted complementary reforms to expand renewable energy, leverage domestic gas as a transition fuel, and strengthen local technical capacity — positioning Nigeria for long-term energy security and sovereignty.
The Presidential Power Sector Debt Reduction Plan is being 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, in collaboration with the Nigerian Bulk Electricity Trading (NBET) Plc and other key industry stakeholders.