The Nigerian Federal Government has reached a landmark agreement with power generation companies (GenCos) on the framework for implementing a massive ₦4 trillion (approximately $2.6bn) intervention plan.
Approved by President Bola Tinubu, the plan authorises the issuance of government-backed bonds to clear verified debts owed to both GenCos and gas suppliers. This represents the largest financial intervention in the sector in over a decade.
The consensus was reached during a high-level meeting in Abuja involving Finance Minister Wale Edun, Power Minister Bayo Adelabu, and the Special Adviser to the President on Energy, Olu Verheijen, alongside senior executives of the generation companies.
Ms. Verheijen confirmed that the meeting concluded with an agreement on the modalities for settling the outstanding arrears, including bilateral negotiations to finalise “full and final settlement agreements.”
The move is designed to tackle a legacy debt overhang that has severely weakened the balance sheets of key operators and hampered necessary investment.
The initiative has been praised by industry leaders. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, was quoted as saying: “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 Presidency stated that the debt plan marks a decisive “reset“ of Nigeria’s electricity market. Officials expect that restoring the financial health of the power companies will unlock fresh investment needed to modernise grid infrastructure and improve the notoriously unreliable power supply across the country.
Ms. Verheijen added that the reforms extend beyond debt clearance, focusing on improving market fundamentals by closing metering gaps, aligning tariffs with efficient costs, and ultimately restoring trust in the regulatory environment.
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