The Federal Government has announced that it has finalised a comprehensive plan to deploy N4 trillion in government-backed bonds to settle verified arrears owed to power generation companies (GenCos) and gas suppliers.
The Special Adviser to the President on Energy, Mrs Olu Verheijen, disclosed this in a statement on Tuesday.
She explained that the bonds form part of an initiative approved by President Bola Tinubu and the Federal Executive Council, designed to tackle long-standing structural challenges in Nigeria’s power sector and foster an environment conducive to substantial private sector investment.
She stated that the agreement was reached during a high-level meeting attended by the duo of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun and the Minister of Power, Chief Bayo Adelabu.
The meeting focused on reviewing and finalising settlement modalities, with a consensus to engage in bilateral negotiations aimed at designing comprehensive settlement agreements that are sustainable within Nigeria’s fiscal realities and the financial constraints faced by GenCos.
Verheijen emphasised that the intervention represents the largest-scale debt resolution effort in more than a decade.
The move seeks to eliminate legacy debts that have stifled growth in the sector, strengthen the financial standing of utility companies, and enhance the reliability of power supply nationwide.
According to the statement, “This is a major step by the federal government towards restoring financial stability and investor confidence within Nigeria’s electricity market.”
The statement added that the initiative aligns with President Tinubu’s strategic vision of modernising the electricity infrastructure by improving grid systems, expanding distribution networks, and scaling embedded generation, with the aim of creating a favourable environment for sustainable growth and private investment.
This development follows the April 2025 warning by GenCos threatening to shut down the country’s power sector over N4 trillion in unpaid legacy debts.