•Intervention largest in over a decade, says Verheijen

Emmanuel Addeh in Abuja

The federal government yesterday took a major step towards restoring financial stability and investor confidence in the electricity market with the finalisation of the implementation framework for the presidential power sector debt reduction plan.

A statement from the Office of the Special Adviser to the President on Energy, Olu Verheijen, described it as a landmark initiative approved by President Bola Ahmed Tinubu to address structural bottlenecks and lay the groundwork for large-scale private sector-led investment and sustained economic growth.

It recalled that on Tuesday, 7 October 2025, in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, the Minister of Power, Chief Bayo Adelabu, and the Special Adviser to the President on Energy,  Verheijen, met with senior executives of Nigeria’s Gencos to review settlement modalities for the outstanding debt.

The meeting, according to the statement, concluded with a consensus on the way forward, which includes conducting bilateral negotiations to finalise full and final settlement agreements that balance fiscal realities with the financial constraints of the Gencos.

Approved by Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025, the plan, the statement said, authorises the issuance of up to N4 trillion in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers.

This intervention, the largest in over a decade, according to the statement, addresses a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country.

“For the first time in years, we are seeing a credible and systematic effort by the government to tackle the root liquidity challenges in the power sector,” the Chairman of Heirs Holdings and Transcorp Power, said Mr. Tony Elumelu was quoted as saying.

“We commend President Tinubu and his economic team for this bold and transformative step,” he added.

Group Managing Director of Saharagroup, Mr. Kola Adesina, echoed the same sentiment, the statement pointed out. “This initiative is significant in every respect. It gives us renewed confidence in the reform process and a clear signal that the government is serious about building a sustainable power sector,” he said.

Beyond clearing arrears, the debt reduction plan, Verheijen said, signals a strategic reset of Nigeria’s electricity market. By restoring the financial health of power companies, it will enable new investment in generation capacity, modernise grid infrastructure, and deliver more reliable electricity to homes and businesses, creating a stronger foundation for industrialization, job creation, and inclusive economic growth.

“Our focus is on creating the right conditions for investment, from modernizing the grid and improving distribution to scaling embedded generation. By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting to support the poor and vulnerable, and restoring regulatory trust, we are shifting from crisis response to sustained delivery and building the confidence needed to attract large-scale private capital,” he stressed.

Besides, Edun was quoted as saying that it will create the enabling conditions for sustained private investment and transform reliable power into a catalyst for economic growth

“These reforms go beyond liquidity. They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation. This is how we create the enabling conditions for sustained private investment and transform reliable power into a catalyst for economic growth,”Edun stated.

Complementary efforts to scale renewable energy, leverage domestic gas as a transition fuel, and build local technical and institutional capacity will position Nigeria not just for energy security, but for energy sovereignty, creating one of Africa’s most attractive power markets, the statement added.

The presidential power sector debt reduction plan is being jointly implemented by the Federal Ministry of Finance, the Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, in collaboration with the Nigerian Bulk Electricity Trading (NBET) Plc and other key stakeholders.

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