The Federal Government has reached an agreement with power generation companies on the implementation framework for the Presidential Power Sector Debt Reduction Plan, a N4tn intervention approved by President Bola Tinubu to stabilise Nigeria’s electricity market and restore investor confidence.
The agreement follows a high-level meeting in Abuja on October 7, 2025, between the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Bayo Adelabu; and the Special Adviser to the President on Energy, Olu Verheijen, alongside senior executives of the nation’s generation companies.
Verheijen revealed this in a statement she signed on Tuesday titled ‘FG, GenCos Finalise Implementation Framework for N4tn Presidential Power Sector Debt Reduction Plan.’
The meeting concluded with a consensus on modalities for settling outstanding debts, including bilateral negotiations to finalise “full and final settlement agreements” that balance fiscal realities with the financial constraints of the GenCos, she stated.
Approved by the Federal Executive Council in August, the plan authorises the issuance of up to N4tn in government-backed bonds to clear verified arrears owed to generation companies and gas suppliers, the largest intervention in the sector in over a decade.
The move targets a legacy debt overhang that has hampered investment and weakened the balance sheets of key operators.
“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,” the statement quoted the Chairman of Heirs Holdings and Transcorp Power, Mr Tony Elumelu, as saying.
“We commend President Tinubu and his economic team for this bold and transformative step,” he added.
Group Managing Director of Sahara Group, Kola Adesina, noted, “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.”
According to the Presidency, the debt plan marks a reset of Nigeria’s electricity market.
By restoring the financial health of power companies, it is expected to unlock fresh investment in generation capacity, modernise grid infrastructure, and improve electricity delivery to homes and industries.
Verheijen explained, “Our focus is on creating the right conditions for investment, from modernising the grid and improving distribution to scaling embedded generation.
“By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting to support the poor, and restoring regulatory trust, we are moving from crisis response to sustained delivery.”
On his part, Edun said the reforms go beyond liquidity management.
“They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation,” he stated.
According to Verheijen, complementary efforts to expand renewable energy, harness domestic gas as a transition fuel, and strengthen local technical capacity are expected to position Nigeria for both energy security and long-term sovereignty, officials said.
The Presidential Power Sector Debt Reduction Plan is being implemented jointly by the Federal Ministries of Finance and Power and the Office of the Special Adviser to the President on Energy, in collaboration with the Nigerian Bulk Electricity Trading Plc and other stakeholders.
