The Federal Government has just taken a major step toward restoring financial stability and investor confidence in the electricity market with the finalization of the ₦4 trillion Presidential Power Sector Debt Reduction Plan.
This isn’t just another policy announcement, it’s a bold, strategic move approved by President Bola Ahmed Tinubu and endorsed by the FEC to finally fix the financial mess that has long crippled Nigeria’s power sector.
For years, unpaid debts owed to power generation companies (GenCos) and gas suppliers have been the biggest drag on the sector, choking liquidity, discouraging investment, and weakening the ability to deliver reliable electricity.
With this new plan, the government is taking a clean, structured approach to clear those verified arrears through the issuance of government-backed bonds. It’s not a bailout, it’s a reset.
The meeting in Abuja between the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Power, Chief Bayo Adelabu; and the President’s Special Adviser on Energy, Olu Verheijen, alongside top executives of GenCos, sealed the framework. They agreed on a realistic settlement process through bilateral negotiations that balance the government’s fiscal realities with the financial strain on the operators.
For once, there’s a proper system in place to verify debts, negotiate transparently, and settle what is due.
Interestingly, the plan isn’t just about paying debts; it’s about rebuilding trust and confidence in the entire power value chain. As Tony Elumelu rightly said, this is the first credible and systematic effort by the government to tackle the root liquidity issues in the power sector. Kola Adesina of Sahara Group echoed it — this move gives genuine hope that reforms are finally being backed by action.
If executed as designed, this ₦4 trillion plan will immediately relieve GenCos and gas suppliers, allowing them to invest again, boost generation capacity, and improve overall reliability. It will also unlock fresh private sector capital, modernize the grid, and deliver more stable power to homes and businesses. It’s a major confidence signal, not just to investors, but to every Nigerian who has waited too long for consistent electricity.
That being said, the real test lies in how well it’s implemented. This is a huge fiscal commitment, so transparency is key. The government must stay firm on verification, publish settlement details, and ensure the accompanying reforms; metering, cost-reflective tariffs, and targeted subsidies would follow immediately. Without those, we risk falling back into the same old cycle.
What is exciting about this is that it isn’t just a financial clean-up, it’s a reset button for Nigeria’s power sector. It shows a government finally matching its words with action, fixing legacy problems, and setting the stage for sustainable, private sector-driven growth. If followed through with discipline and transparency, the Presidential Power Sector Debt Reduction Plan could be remembered as the moment Nigeria started turning its power promise into real, reliable progress.
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