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From Juliana Taiwo-Obalonye, Abuja
The Federal Government of Nigeria has finalised a vital framework to implement the ₦4 trillion Presidential Power Sector Debt Reduction Plan aimed at resolving longstanding debts and stabilising the electricity market. This move, signed off by President Bola Tinubu, seeks to spur private investment and drive economic growth through a healthier power sector.
In a statement signed by Senan Murray of the Media and Communications Unit, Office of the Special Adviser to the President on Energy, the agreement was reached on 7 October 2025 during a high-level meeting in Abuja involving the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the Minister of Power, Bayo Adelabu, the Special Adviser to the President on Energy, Olu Verheijen, and senior officials of the electricity generation companies (GenCos). They agreed to proceed with bilateral talks to finalise comprehensive settlement deals balancing fiscal realities with GenCos’ operational needs.
Edun, who signed the statement, described the plan as “a foundational reform that restores balance and trust in our power sector, paving the way for sustained private sector participation and reliable electricity supply for all Nigerians.”
He added, “We are not just addressing debt; we are setting a new trajectory for Nigeria’s power sector — one that supports industrialisation and job creation through consistent and affordable power.”
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The plan, endorsed by the Federal Executive Council in August 2025, enables the issuance of government-backed bonds up to ₦4 trillion to clear verified debts owed to power and gas suppliers. This effort targets legacy debts that have previously restricted investment and weakened electricity infrastructure.
Industry leaders have praised the initiative. Chairman of Heirs Holdings and Transcorp Power, Tony Elumelu, hailed it as “a historic and decisive action that will unlock Nigeria’s power potential.” Similarly, Group Managing Director of Sahara Group, Kola Adesina, called it “a clear signal of government commitment to power sector reform.”
The initiative also includes measures to modernise the grid, increase generation capacity, close metering gaps, and improve tariff structures to protect vulnerable populations while encouraging investment.
The debt reduction scheme is a joint effort led by the Ministries of Finance and Power alongside the Office of the Special Adviser to the President on Energy and Nigerian Bulk Electricity Trading Plc.
