By Ikugbadi Oluwasegun
The federal government and the power Generation Companies GENCOs in the country have finalised an implementation framework for the Presidential Power Sector Debt Reduction Plan.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the Minister of Power, Adebayo Adelabu, and the Special Adviser to the President on Energy, Olu Verheijen, had earlier met with representatives of Generation companies GENCOs to review settlement modalities for the outstanding debt.
All parties agree to conduct bilateral negotiations to finalize full and final settlement agreements that balance fiscal realities with the financial constraints of the Generation Companies.
Beyond clearing arrears, the debt reduction plan signals a strategic reset of Nigeria’s electricity market by restoring the financial health of power companies, enable new investment in generation capacity, modernize grid infrastructure, and deliver more reliable electricity to homes and businesses, creating a stronger foundation for industrialization, job creation, and inclusive economic growth.
A statement from the office of Special Adviser to the President on Energy, says the intervention, the largest in more than a decade, addresses a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country.
The Generation Companies describes the initiative as significant in every respect as it gives them renewed confidence in the reform process and a clear signal that the government is committed to building a sustainable power sector.
Approved by President Tinubu and endorsed by the Federal Executive Council in August 2025, the plan authorizes the issuance of up to four trillion naira in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers.
