The Federal Government has completed the implementation framework for the ₦4 trillion Presidential Power Sector Debt Reduction Plan, marking a major step toward restoring financial stability and investor confidence in Nigeria's electricity market.
Approved by President Bola Ahmed Tinubu and ratified by the Federal Executive Council in August 2025, the plan is one of the government's most ambitious fiscal interventions in over a decade. It seeks to clear verified arrears owed to electricity generation companies (GenCos) and gas suppliers — a move expected to unlock new investments and strengthen power utilities.
According to a statement signed by Senan Murray from the Office of the Special Adviser to the President on Energy, the initiative aims to enhance liquidity, improve operational efficiency, and ensure a more reliable electricity supply across the country.
During a high-level meeting held in Abuja on October 7, 2025, 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, Mrs. Olu Verheijen, met with senior GenCo executives to agree on settlement modalities and a framework for implementation.
Mr. Edun said the reforms extend beyond financial relief, emphasising the need to rebuild the fundamentals of the power sector.
Mrs. Verheijen noted that the administration's focus is on creating the right environment for investment through grid modernisation, scaling embedded generation, closing metering gaps, and aligning tariffs with efficient costs.
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The session concluded with a consensus to begin bilateral negotiations for full and final settlement agreements that balance fiscal discipline with operators' financial needs.
Chairman of Heirs Holdings and Transcorp Power, Mr. Tony Elumelu, commended President Tinubu and his economic team for the bold and transformative step, describing it as "a credible and systematic effort to tackle the root liquidity challenges in the power sector."
Similarly, Group Managing Director of Sahara Group, Mr. Kola Adesina, said the framework signals renewed confidence in the reform process and demonstrates government's seriousness about building a sustainable electricity market.
Under the plan, the government will issue bonds of up to ₦4 trillion to clear legacy debts that have constrained power generation and discouraged investment for years. Beyond debt settlement, the initiative aims to reset the entire electricity value chain — attracting private investment, modernising grid infrastructure, and improving service delivery to homes and industries.
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 Plc (NBET) and other stakeholders.
It also aligns with national efforts to expand renewable energy, leverage domestic gas as a transition fuel, and strengthen institutional capacity for long-term sector sustainability.
