The Nigerian government, in collaboration with power-generating companies, has finalized a payment plan to address the presidential power sector debt. A statement from Olu Verheijen, the Special Adviser to the President on Energy, indicates that this development is anticipated to restore financial stability and boost investor confidence in the electricity market. The debt reduction framework, which received approval from President Bola Tinubu, aims to tackle structural bottlenecks and establish a foundation for large-scale private sector investment and sustained economic growth.
On October 7, 2025, a meeting took place involving Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, Bayo Adelabu, the Minister of Power, and Verheijen, along with senior executives from Generation Companies (GenCos). The discussions focused on reviewing the modalities for settling the outstanding debt. The meeting concluded with a consensus on the path forward, which includes conducting bilateral negotiations to finalize comprehensive settlement agreements that consider both fiscal realities and the financial constraints faced by the GenCos.
Endorsed by the Federal Executive Council in August 2025, the plan authorizes the issuance of up to ₦4 trillion in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers. This intervention, the largest in over a decade, addresses a legacy debt overhang that has hindered investment, weakened utility balance sheets, and obstructed reliable power delivery across Nigeria. Industry leaders, such as Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, and Kola Adesina, Group Managing Director of Sahara Group, have praised the government’s efforts, expressing that the initiative renews their confidence in the reform process.
The debt reduction plan represents a strategic reset of Nigeria’s electricity market, facilitating new investments in generation capacity, modernizing grid infrastructure, and ensuring more reliable electricity for homes and businesses. The government’s focus is on creating favorable conditions for investment, which includes modernizing the grid, improving distribution, and scaling embedded generation. By addressing metering gaps, aligning tariffs with efficient costs, and restoring regulatory trust, the government aims to attract substantial private capital and transform reliable power into a catalyst for economic growth.
The implementation of the Presidential Power Sector Debt Reduction Plan is a collaborative effort involving the Federal Ministry of Finance, the Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, alongside the Nigerian Bulk Electricity Trading Plc and other key stakeholders. The successful execution of this plan is expected to significantly impact Nigeria’s economy, facilitating sustained private investment and promoting overall economic growth.
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