FG, GENCOs Finalise Implementation Framework for Four Trillion Naira Debt Reduction Plan
Abuja, Nigeria — October 15, 2025
The Federal Government of Nigeria and the country’s Generation Companies (GENCOs) have finalized the implementation framework for the Presidential Power Sector Debt Reduction Plan, a strategic intervention aimed at resolving long-standing financial challenges within the power sector.
Key government officials—including Minister of Finance and Coordinating Minister of the Economy, Wale Edun; Minister of Power, Adebayo Adelabu; and the Special Adviser to the President on Energy, Olu Verheijen—recently met with representatives of the GENCOs to review and advance settlement modalities for the outstanding power sector debts.
In a spirit of cooperation, all parties have agreed to conduct bilateral negotiations to finalize full and final settlement agreements that take into account both the fiscal realities of the Federal Government and the financial constraints faced by the Generation Companies.
More than just clearing arrears, the four trillion naira debt reduction plan represents a strategic reset for Nigeria’s electricity market. The initiative aims to restore the financial health of power companies, attract new investment in generation capacity, modernize grid infrastructure, and ultimately provide more reliable electricity to Nigerian homes and businesses. This, in turn, is expected to lay a stronger foundation for industrialization, job creation, and inclusive economic growth across the nation.
ZZAa,zazźA statement from the office of the Special Adviser to the President on Energy highlighted that this intervention—the largest in over a decade—addresses a legacy debt overhang that has historically constrained investment, weakened utility balance sheets, and hindered reliable power delivery throughout the country.
GENCOs have described the initiative as significant on all fronts, noting that it renews their confidence in the ongoing reform process and sends a clear signal of the government’s commitment to building a sustainable and .
resilient power sector.
The plan, which was approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council in August 2025, authorizes the issuance of government-backed bonds worth up to four trillion naira to settle verified arrears owed to generation companies and gas suppliers.
This milestone marks a crucial step toward revitalizing Nigeria’s power sector, promising improved electricity supply and enhanced economic prospects for Nigerians nationwide.
