By Ayomide Otitoju
The Federal Government and electricity generation companies (GenCos) have agreed on a comprehensive payment plan to settle outstanding debts under the Presidential Power
A statement released on Tuesday by the Special Adviser to the President on Energy, Olu jen, said the framework, approved by President Bola Tinubu, is designed to address structural bottlenecks and pave the way for large-scale private investment and sustained economic growth.
On October 7, 2025, in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, Minister of Power, Bayo Adelabu, and Verheijen met with senior executives of GenCos to review modalities for settling the debt. The meeting produced a consensus on conducting bilateral negotiations to finalise settlement agreements that balance fiscal realities with the GenCos’ financial constraints.
Approved by the Federal Executive Council (FEC) in August 2025, the plan authorises the issuance of up to ₦4 trillion in government-backed bonds to clear verified arrears owed to generation companies and gas suppliers. The initiative marks the most significant intervention in the power sector in more than a decade, targeting long-standing debts that have hindered investment, weakened balance sheets, and constrained reliable electricity supply.
Industry leaders hailed the move as a turning point for the sector. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, commended the administration for taking “a credible and systematic approach to tackling the root liquidity challenges in the power sector.” Similarly, Kola Adesina, Group Managing Director of Sahara Group, described the plan as “a significant and confidence-boosting step” toward sector reform.
Verheijen said the debt reduction initiative represents a “strategic reset” of Nigeria’s power industry, aimed at restoring the financial health of power companies, modernising grid infrastructure, and enabling new investments to improve supply reliability.
“Our focus is on creating the right conditions for investment—from modernising the grid and scaling embedded generation to improving distribution and metering,” Verheijen stated.
Finance Minister Wale Edun added that the reforms go beyond liquidity restoration, emphasising that the plan seeks to rebuild the fundamentals of the power sector to attract private capital and drive industrial growth.
“By aligning tariffs with efficient costs, targeting subsidies to protect the vulnerable, and rebuilding regulatory trust, we are creating a foundation for reliable power as a catalyst for economic transformation,” Edun said.
The Presidential Power Sector Debt Reduction Plan is being implemented collaboratively by the Federal Ministry of Finance, Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, in partnership with the Nigerian Bulk Electricity Trading (NBET) Plc and other key stakeholders.
