Table of Contents
- Announcement of the Plan
- Details of the Initiative
- High-Level Meeting
- Significance of the Intervention
- Strategic Vision of the Government
- Background Context
The Federal Government has announced that it has finalized 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 information in a statement on Tuesday.
She explained that the bonds are part of an initiative approved by President Bola Tinubu and the Federal Executive Council, aimed at addressing long-standing structural issues within Nigeria’s power sector and creating an environment conducive to significant private sector investment.
She stated that the agreement was reached during a high-level meeting attended by 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 finalizing 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 emphasized that this intervention represents the largest-scale debt resolution effort in over a decade.
This initiative seeks to eliminate legacy debts that have hindered growth in the sector, strengthen the financial position of utility companies, and improve the reliability of power supply nationwide.
According to the statement, “This is a significant step by the federal government towards restoring financial stability and investor confidence within Nigeria’s electricity market.”
The statement further noted that the initiative aligns with President Tinubu’s strategic vision of modernizing the electricity infrastructure by enhancing grid systems, expanding distribution networks, and scaling embedded generation, with the goal of creating a favorable environment for sustainable growth and private investment.
This development follows the April 2025 warning by GenCos, which threatened to shut down the country’s power sector due to N4 trillion in unpaid legacy debts.
Frequently Asked Questions
What is the purpose of the N4 trillion government-backed bonds?
The purpose of the N4 trillion government-backed bonds is to settle verified arrears owed to power generation companies (GenCos) and gas suppliers, thereby addressing long-standing issues in Nigeria’s power sector.
Who announced the plan for the bonds?
The plan for the bonds was announced by Mrs. Olu Verheijen, the Special Adviser to the President on Energy.
Why is this intervention significant?
This intervention is significant because it represents the largest-scale debt resolution effort in over a decade, aiming to eliminate legacy debts that have impeded growth in the power sector and improve the financial health of utility companies.
