The Federal Government on Tuesday announced that it has finalized a comprehensive plan to deploy ₦4 trillion in government-backed bonds to settle verified arrears owed to power generation companies (GenCos) and gas suppliers. The move is aimed at restoring financial stability in the electricity sector and boosting investor confidence.
Mrs Olu Verheijen, the Special Adviser to the President on Energy, confirmed the development in a statement issued in Abuja. She explained that the bonds are part of an initiative approved by President Bola Tinubu and the Federal Executive Council to address deep-rooted structural challenges in Nigeria’s power sector.
According to Verheijen, the measure will “foster an environment conducive to massive private sector investment” and help strengthen the financial health of power utilities that have struggled with liquidity issues for years.
The agreement was finalized during a high-level meeting attended by key government officials, including the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun; the Minister of Power, Chief Bayo Adelabu; and Mrs. Verheijen.
The meeting focused on reviewing and finalizing settlement modalities, with stakeholders agreeing to engage in bilateral negotiations to develop sustainable settlement agreements that reflect Nigeria’s fiscal realities and the financial challenges faced by GenCos.
Mrs. Verheijen stated that the intervention represents “the largest-scale debt resolution effort in over a decade.” She added that it aims to eliminate legacy debts that have limited growth in the energy market, improve the bottom lines of utility firms, and enhance the reliability of power supply nationwide.
“This is a major step by the federal government towards restoring financial stability and investor confidence within Nigeria’s electricity market,” she said.