KEY POINTS
- FG targets N1.23 trillion to settle power sector debts.
- Presidential programme aims to restore liquidity and investor confidence.
- Debt clearance part of broader power sector reforms underway.
The Federal Government has announced plans to raise N1.23 trillion over the next four months to settle longstanding debts owed to power generation companies (Gencos) and gas suppliers.
The initiative forms part of the Presidential Power Sector Debt Reduction Programme, signaling a renewed commitment to stabilising Nigeria’s electricity industry.
FG moves to settle verified power sector debts
The first phase of issuing bonds, which is projected to be done by the end of the first quarter of 2026, will pay off debts that have been confirmed after long negotiations with GenCos and gas suppliers.
A few corporations have already agreed to settle, while talks are still going on with the other operators. The Federal Government will guarantee the 7-year fixed-rate bonds, giving investors confidence in the programme.
The authorities launched the initiative at a virtual investor forum attended by over 600 participants, including banks, pension funds, insurance companies, asset managers, and other institutional investors.
Special Adviser to the President on Energy, Mrs Olu Verheijen, emphasized that the programme represents a strategic reset rather than a bailout, designed to restore liquidity and give GenCos the operational footing they need to invest with confidence.
Debt settlement supports broader power sector reforms
Finance Minister Olawale Edun and Power Minister Chief Adebayo Adelabu highlighted ongoing reforms, including cost-reflective tariffs and improved revenue collection, which have increased DisCos’ collections from N1 trillion in 2023 to an estimated N2.2 trillion in 2025.
Verheijen said that paying off debts is only one part of keeping the sector stable. Coupled with financial and operational reforms, the programme aims to create a reliable and commercially sustainable electricity market that attracts investment and delivers consistent power to Nigerians.
The Presidential Power Sector Debt Reduction Programme, approved by President Bola Tinubu and endorsed by the Federal Executive Council in August 2025, authorizes up to ₦4 trillion in government-backed bonds, further marking the largest coordinated financial intervention in Nigeria’s power sector history.
