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<p>By Yusuf Danjuma Yunusa</p><div class="u03fZ0Xy" style="clear:both;float:left;width:100%;margin:0 0 20px 0;"><script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>

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<p>The Federal Government has finalised the implementation framework for a â¦4 trillion Presidential Power Sector Debt Reduction Plan, a landmark agreement with electricity generation companies (GenCos) designed to resolve the sector&#8217;s chronic liquidity crisis and restore investor confidence.</p>
<p>The plan, as approved on Tuesday by President Bola Ahmed Tinubu, authorises the issuance of government-backed bonds to clear legacy debts owed to GenCos and their gas suppliers. According to Mrs. Olu Verheijen, Special Adviser to the President on Energy, this initiative is a critical step toward establishing a sustainable, private-sector-driven electricity market.</p>
<p>The agreement was reached at a high-level meeting in Abuja attended by Mr Wale Edun, Minister of Finance and Coordinating Minister of the Economy; Chief Bayo Adelabu, Minister of Power; and senior executives of power generation companies. The parties agreed to commence bilateral negotiations to finalise settlement terms for verified debts owed to the GenCos and gas suppliers.</p>
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<p>Approved by the Federal Executive Council (FEC) in August 2025, the initiative authorises the issuance of government-backed bonds worth up to â¦4 trillion to clear legacy arrears that have constrained investment, weakened utilities’ balance sheets, and undermined reliable electricity supply for years.</p>
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<p>Business leaders have hailed the move as a turning point for Nigeria’s power sector. Mr Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power, described it as “a credible and systematic effort to tackle the root liquidity challenges” that have plagued the sector.</p>
<p>Similarly, Mr Kola Adesina, Group Managing Director of Sahara Power Group, said the initiative “signals renewed confidence in the reform process and shows the government’s seriousness about building a sustainable energy future.”</p>
<p>According to Mrs Verheijen, the debt reduction plan is part of a broader strategy to reform the electricity value chain — from modernising grid infrastructure and closing metering gaps to aligning tariffs with actual costs and ensuring targeted subsidies for vulnerable citizens.</p>
<p>“We are moving from crisis management to sustained delivery,” she said. “By restoring the financial health of the power companies and building regulatory trust, we are creating the right environment to attract large-scale private capital and ensure reliable power for homes and businesses.”</p>
<p>The initiative marks the largest intervention in Nigeria’s power sector in over a decade and is expected to unlock new investments, strengthen energy security, and accelerate industrial and economic growth.</p>
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