The Federal Government has finalised implementation frameworks for a ₦4 trillion government-backed bond aimed at settling verified arrears owed to power Generation Companies (GenCos) and gas suppliers.
This was disclosed in a statement signed by Senan Murray of the Media and Communications Unit, Office of the Special Adviser to the President on Energy, on Tuesday.
According to the release, the initiative—known as the Presidential Power Sector Debt Reduction Plan—was approved by President Bola Ahmed Tinubu to address long-standing structural bottlenecks in the power sector, restore investor confidence, and create conditions for sustainable, private sector-led growth.
The statement noted that the plan, endorsed by the Federal Executive Council (FEC) in August 2025, authorises the issuance of up to ₦4 trillion in government-backed bonds to clear verified debts owed to GenCos and gas suppliers.
“This intervention, the largest in over a decade, targets legacy debt overhangs that have constrained investment, weakened utility balance sheets, and hindered reliable electricity delivery nationwide,” the statement read.
The meeting, according to the release, concluded with agreements on next steps, including bilateral negotiations to finalise settlement frameworks that balance fiscal realities with the financial challenges facing the power generation firms.
Industry leaders welcomed the move, describing it as a long-overdue and transformative step toward addressing liquidity issues in the energy sector.
Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, lauded the initiative, 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. We commend President Tinubu and his economic team for this bold and transformative step.”
Similarly, Kola Adesina, Group Managing Director of Sahara Group, noted that the plan “gives renewed confidence in the reform process and sends a clear signal that government is serious about building a sustainable power sector.”
Olu Verheijen, Special Adviser to the President on Energy, explained that the plan would also help modernise the grid, close metering gaps, align tariffs with efficient costs, improve subsidy targeting for the poor, and restore regulatory trust.
