PRESIDENT Bola Ahmed Tinubu has approved a ₦4 trillion bond to settle verified debts owed to power generation companies (GenCos) and gas suppliers, a move the Federal Government said will stabilise the country’s troubled electricity market and restore investor confidence.
The Minister of Power, Adebayo Adelabu, disclosed the approval at the Expert Forum on “Uninterrupted Power: The Industrial Imperative” organised by the Nigeria Economic Summit Group (NESG) in Abuja on Monday, October 6.
Adelabu said the debt clearance is part of a broader financial reform plan under the Renewed Hope Agenda, aimed at strengthening liquidity and sustainability across the power value chain.
“To stabilise the market, Mr President has approved a ₦4 trillion bond to clear verified debts owed to GenCos and gas suppliers,” he said, adding that a targeted subsidy framework is also being developed to cushion the impact of energy cost adjustments on low-income households while sustaining commercial viability for operators.
According to the minister, the government is adopting a multi-dimensional approach to revive the sector, including tariff reforms, infrastructure expansion, local content promotion, and an energy transition plan designed to boost generation and transmission capacity.
He noted that tariff adjustments for certain consumer categories have already improved supply reliability and revenue collection. “Industry revenue has grown by 70 per cent, reaching ₦1.7 trillion in 2024, and is projected to exceed ₦2 trillion in 2025,” Adelabu said.
The approval of the ₦4 trillion bond comes amid an escalating liquidity crisis in Nigeria’s power sector. In September 2025, The ICIR reported that GenCos were owed ₦5.6 trillion by the Federal Government as of August, according to the Association of Power Generating Companies (APGC).
The association’s managing director, Joy Ogaji, told The ICIR that monthly unpaid invoices from the government average ₦200 billion, adding that the sector’s financial strain had become “an existential threat” to electricity generation and gas supply.
She noted that although President Tinubu had promised to intervene through a ₦4 trillion bond issuance after meeting with GenCos in July 2025, operators had expressed concern about the lack of clarity and timelines for implementation.
Ogaji explained that the debt affects both GenCos and gas suppliers, and that inadequate remittance from Distribution Companies (DisCos) remains a major source of the recurring liquidity shortfall.
Learning from Ghana’s payment model
Energy experts have consistently warned that without a sustainable payment structure, the Nigerian Electricity Supply Industry (NESI) will continue to face revenue leakages.
In an earlier interview with The ICIR, Ogaji urged Nigeria to emulate Ghana’s “cash waterfall mechanism”, a structured model that prioritises payment to gas transporters and independent power producers before other expenditures.
“In Ghana, the system ensures that funds from electricity sales are distributed transparently and promptly to operators. That model has helped them maintain stability,” Ogaji said.
Analysts believe adopting a similar payment hierarchy in Nigeria could improve liquidity flow, reduce gas supply disruptions, and prevent recurring shutdowns by GenCos.
Government’s reform drive
While speaking on Monday at the Expert Forum on “Uninterrupted Power: Adelabu reiterated that the government is committed to overhauling the power sector through legislative and policy interventions, enhanced regulation, and infrastructure investment.
He stated that the Presidential Power Initiative (PPI), jointly implemented with Siemens Energy and other international partners, has already added 700 megawatts (MW) of transmission capacity through its Phase Zero rollout. Phase One, he said, is designed to inject an additional 7,000 MW into the national grid, supported by financing from Power China, Elswedy Electric, and China Machinery Engineering Corporation (CMEC).
The minister also revealed that rehabilitation works are ongoing at several National Integrated Power Projects (NIPPs) to recover about 345 MW. At the same time, the 700 MW Zungeru Hydropower Plant has been successfully integrated into the grid.
“These interventions are expected to improve energy access, reduce technical losses, and strengthen the financial health of the electricity market,” he said.
A reporter with the ICIR
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