- Nigeria launches a ₦4 trillion debt reduction plan for the power sector.
- The move aims to boost investor confidence and strengthen electricity reforms.
The federal government and electricity generation companies (GenCos) have agreed on the Nigerian power sector debt reduction plan. The ₦4 trillion initiative marks a significant step toward stabilising the electricity market and restoring investor confidence.
According to the Office of the Special Adviser to the President on Energy, the plan will inject liquidity and attract more private capital into the sector. It also aims to clear long-standing arrears and remove financial barriers limiting power sector growth.
Approved by President Bola Tinubu, the initiative demonstrates the administration’s determination to address structural issues in the energy market. Moreover, it seeks to lay a solid foundation for private sector participation and sustainable expansion.
On 7 October 2025, in Abuja, the Minister of Finance, Mr Wale Edun, the Minister of Power, Mr Bayo Adelabu, and the Special Adviser on Energy, Mrs Olu Verheijen, met with senior GenCos executives. During the meeting, they reviewed settlement modalities for the outstanding debts. After extensive talks, both sides agreed to hold bilateral negotiations to ensure repayment terms reflect current fiscal conditions.
In August 2025, the Federal Executive Council (FEC) endorsed the plan and approved the issuance of government-backed bonds worth up to ₦4 trillion. Consequently, these bonds will settle verified arrears owed to power generation firms and gas suppliers. The Ministry of Finance, the Ministry of Power, and the Office of the Special Adviser on Energy jointly implement the plan with the Nigerian Bulk Electricity Trading (NBET) Plc.
This is the most significant power sector intervention in over a decade. It will clear legacy debts that have weakened utilities, reduced efficiency, and discouraged investment. As a result, the Nigeria power sector debt reduction plan will improve liquidity, attract new funding, and enhance electricity reliability nationwide.
Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, praised the initiative. He said it reflects strong political will and genuine commitment to solving the liquidity challenge. Similarly, Kola Adesina, Group Managing Director of Sahara Group, noted that the plan rebuilds investor confidence and confirms that reforms are on track.
Beyond debt repayment, the framework signals a strategic reset for Nigeria’s electricity market. It will encourage new investment, expand grid capacity, and ensure stable power for homes and industries. In addition, it aligns with the government’s broader vision for industrial growth and energy reform.
Mrs Verheijen explained that the reforms aim to create a fair and transparent environment for investors. She highlighted the need to modernise the grid, close metering gaps, and implement cost-reflective tariffs to build market trust.
Mr Edun added that reliable power is essential for industrialisation, job creation, and economic growth. Therefore, the reforms focus on rebuilding the electricity sector’s fundamentals to support national development.
Furthermore, the government is scaling up renewable energy projects and using domestic gas as a transition fuel. According to officials, these initiatives will strengthen energy security and help Nigeria achieve true energy independence.