KEY POINTS
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FG launches ₦4 trillion bond to clear GenCos’ arrears.
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The bond aims to restore investor confidence in Nigeria’s power sector.
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Industry leaders call it a credible and long-overdue reform.
The Federal Government has approved a ₦4 trillion bond programme to pay verified debts owed to power Generation Companies (GenCos) and gas suppliers. The decision forms part of a broader effort to restore stability and rebuild investor confidence in Nigeria’s struggling electricity market.
The announcement came through the Special Adviser to the President on Energy, Olu Verheijen, who explained that the framework was finalised after extensive consultations with key stakeholders in Abuja.
During the meeting, the Ministers of Finance, Wale Edun, and Power, Bayo Adelabu, joined discussions on how to resolve the long-standing arrears that have limited sectoral growth and discouraged new investments. By reaching this agreement, the government signalled a renewed commitment to addressing structural weaknesses that have plagued the power sector for years.
₦4 trillion bond for power sector
According to a statement signed by Senan Murray, who heads Media and Communications in the energy adviser’s office, the meeting ended with an agreement on the next steps. Both parties will now hold direct talks to finalise payment plans that balance government finances with the GenCos’ financial pressures.
Murray said the ₦4 trillion bond marks the largest government intervention in over ten years. He noted that the move targets a legacy debt problem that has weakened utilities and delayed reliable power delivery nationwide. He added that the bond represents a strong signal that the government is serious about fixing the sector and improving financial discipline.
Power sector reforms gain momentum
The initiative was approved by President Bola Tinubu and the Federal Executive Council to address structural bottlenecks in the energy market. Verheijen said the government plans to modernise the grid, improve distribution, and close metering gaps. She added that aligning tariffs with true costs and improving subsidy targeting will make the sector more efficient.
According to Vanguard, Finance Minister Edun said the reform goes beyond paying debts. He explained that it aims to rebuild the foundation of Nigeria’s electricity market so it works for investors and citizens.
Industry leaders Tony Elumelu of Heirs Holdings and Kola Adesina of Sahara Power praised the plan. They said it shows a credible and coordinated government effort to solve the liquidity crisis that has held back the power sector for years.
“Nigeria’s Finance and Power Ministries, alongside the Energy Adviser’s Office and NBET, are implementing the ₦4 trillion bond to reform the power sector.”
