Nigerian Government Approves ₦4 Trillion Bond to Clear GenCos, Gas Suppliers’ Arrear

The Federal Government of Nigeria has finalized plans to issue ₦4 trillion in government-backed bonds to settle verified legacy debts owed to power Generation Companies (GenCos) and gas suppliers, aiming to stabilize the electricity sector. Olu Verheijen, Special Adviser to the President on Energy, announced the initiative following a meeting in Abuja between federal officials and GenCos’ senior executives.
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‎The meeting, attended by Minister of Finance Wale Edun, Minister of Power Bayo Adelabu, and Verheijen, resulted in an agreement to conduct bilateral negotiations to finalize settlement terms that balance fiscal constraints with GenCos’ financial challenges. Senan Murray, Head of Media and Communications in Verheijen’s office, described the intervention as the largest in over a decade, addressing a debt overhang that has stifled investment, weakened utility balance sheets, and hindered reliable power delivery.
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‎Verheijen emphasized the government’s focus on modernizing the grid, improving distribution, scaling embedded generation, closing metering gaps, aligning tariffs with costs, and enhancing regulatory trust to attract private-sector investment. “The sector is shifting from crisis response to sustained delivery,” she said.
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‎Edun highlighted that the reforms aim to rebuild the sector’s fundamentals to drive economic growth and attract large-scale private capital. He noted plans to scale renewable energy, leverage domestic gas, and build local capacity to position Nigeria as one of Africa’s most attractive power markets.
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‎Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, praised the government’s systematic approach to tackling liquidity challenges, while Kola Adesina of Sahara Power Group called the initiative a “strategic reset” for the electricity market, signaling renewed confidence in reforms.
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‎The Presidential Power Sector Debt Reduction Plan, implemented by the Ministries of Finance and Power, the Office of the Special Adviser on Energy, and the Nigerian Bulk Electricity Trading (NBET) Plc, follows President Tinubu’s recent assurance to GenCos of a thorough debt audit and settlement commitment.