Mkpoikana Udoma Port Harcourt — The Federal Government has finalized the implementation framework for the Presidential Power Sector Debt Reduction Plan, a landmark N4 trillion intervention approved by President Bola Ahmed Tinubu to restore liquidity, investor confidence, and long-term financial stability in Nigeria’s electricity market.
The plan, the most ambitious in over a decade, seeks to clear verified arrears owed to electricity generation companies (GenCos) and gas suppliers, unlock private sector-led investments, and establish a sustainable foundation for reliable power supply across the country.
At a high-level meeting in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the Minister of Power, Chief Bayo Adelabu, and the Special Adviser to the President on Energy, Olu Verheijen, met with senior executives of GenCos to finalize settlement modalities and agree on next steps.
The meeting produced a consensus on conducting bilateral negotiations to conclude full and final settlement agreements that balance fiscal realities with the financial constraints of the GenCos.
Speaking at the session, Mr. Wale Edun said the initiative marked a turning point in Nigeria’s effort to restore stability to the power value chain.
“These reforms go beyond liquidity,” Edun said. “They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation. This is how we create the enabling conditions for sustained private investment and transform reliable power into a catalyst for economic growth.”
The plan, which was endorsed by the Federal Executive Council since August, authorizes the issuance of government-backed bonds of up to N4 trillion to offset verified arrears owed to GenCos and gas producers, a debt overhang that has crippled balance sheets, stalled new investments, and undermined power reliability.
Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, hailed the development as a decisive and overdue policy step.
“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,” Elumelu said. “We commend President Tinubu and his economic team for this bold and transformative step.”
Similarly, Mr. Kola Adesina, Group Managing Director of Sahara Group, said the initiative sends the right signal to investors.
“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,” he said.
Special Adviser to the President on Energy, Olu Verheijen, described the initiative as a strategic reset for the power market.
“Our focus is on creating the right conditions for investment, from modernizing the grid and improving distribution to scaling embedded generation,” Verheijen explained.
“By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting to support the poor and vulnerable, and restoring regulatory trust, we are shifting from crisis response to sustained delivery.”
Beyond debt clearance, the framework is expected to unlock new capital inflows into the electricity market, modernize transmission infrastructure, and expand generation capacity, particularly in renewable and gas-based power.
Complementary reforms under the plan include scaling renewable energy integration, leveraging domestic gas as a transition fuel, and building local technical capacity to achieve 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 Plc, NBET, and other sector stakeholders.
