The Federal Government of Nigeria has concluded plans to issue a ₦4 trillion sovereign bond aimed at clearing verified debts owed to power generation companies (GenCos) and gas suppliers, marking a major intervention in the electricity sector.
This was revealed by the Special Adviser to the President on Energy, Mrs. Olu Verheijen, in a statement signed by her media aide, Senan Murray, and released in Abuja.
According to Murray, the decision followed a strategic meeting between senior government officials and executives of power generation companies to finalise modalities for the settlement of outstanding arrears.
The meeting was attended by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun; Minister of Power, Chief Bayo Adelabu; and Mrs. Verheijen.
Verheijen explained that the new debt settlement framework will involve bilateral negotiations to agree on final payment structures that balance fiscal constraints with the financial realities of the power sector.
“This intervention represents the most significant fiscal step in more than a decade to resolve a debt overhang that has hindered investment, weakened utilities, and disrupted reliable power delivery,” Murray stated.
He added that the initiative aligns with President Bola Tinubu’s reform agenda and the Federal Executive Council’s approval to address long-standing liquidity bottlenecks in the power industry while attracting large-scale private sector investments.
Verheijen emphasized that the Federal Government is focused on creating an enabling environment for power sector growth through grid modernization, improved distribution efficiency, and expansion of embedded generation capacity.
She added that the plan will also target reducing metering gaps, aligning tariffs with cost-reflective levels, improving subsidy targeting for vulnerable groups, and restoring investor and regulatory confidence.
Minister Wale Edun noted that the reforms go beyond debt clearance, saying they are designed to “rebuild the fundamentals of the power sector so it works for investors, citizens, and future generations.”
He highlighted that the reforms will also promote renewable energy adoption, harness domestic gas as a transition fuel, and develop local technical expertise to achieve long-term energy security.
Industry stakeholders, including Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, and Mr. Kola Adesina, Group Managing Director of Sahara Power Group, commended the initiative, describing it as a credible step toward stabilizing the electricity market and boosting investor confidence.
The Presidential Power Sector Debt Reduction Plan is being jointly implemented by the Federal Ministries of Finance and Power, alongside the Office of the Special Adviser to the President on Energy and the Nigerian Bulk Electricity Trading (NBET) Plc.
