Tinubu Approves ₦4 Trillion Bond to Settle Power Sector Debts and Stabilise Electricity Market

President Bola Tinubu has approved a landmark ₦4 trillion bond to clear verified debts owed to power generation companies (GenCos) and gas suppliers, marking a major step toward restoring confidence in Nigeria’s electricity industry. The announcement was made by the Minister of Power, Adebayo Adelabu, during the Expert Forum on “Uninterrupted Power: The Industrial Imperative” organised by the Nigeria Economic Summit Group (NESG) in Abuja.

Adelabu explained that the bond approval is a central part of the Federal Government’s broader financial stabilisation initiative under the Renewed Hope Agenda, which seeks to address deep-rooted liquidity challenges that have plagued the power sector for years.

“To stabilise the market, Mr President has approved a ₦4tn bond to clear verified GenCo and gas supply debts,” the minister said. He noted that the measure would provide the much-needed financial relief required to improve power generation, enhance investor confidence, and create a more sustainable electricity value chain.

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In addition to the bond, the government is also developing a targeted subsidy framework designed to protect vulnerable households while steering the country toward full commercialisation of the power industry. The plan is to balance social responsibility with economic efficiency, ensuring that while low-income consumers are shielded, the power sector can still operate profitably and attract private investments.

₦4 Trillion Bond: A Turning Point for Nigeria’s Power Industry

According to Adelabu, the debt clearance will serve as a financial reset for the electricity market. Many power generation and gas supply companies have struggled under the weight of unpaid invoices, leading to reduced operational capacity and stalled investments. “The debt settlement will unlock liquidity, enhance generation capacity, and improve operational efficiency,” he stated.

The minister further noted that the government’s comprehensive approach spans legislative reforms, infrastructure development, energy transition initiatives, and local content expansion. Collectively, these efforts are designed to create a sustainable and investor-friendly electricity market that can support Nigeria’s industrial and economic growth.

He emphasised that the administration’s objective is to build a financially viable power sector where operators can recover their costs, reinvest profits, and contribute to a steady improvement in energy supply.

Tariff Reforms Showing Early Success

Adelabu also highlighted that the ongoing tariff reforms are already yielding tangible results. The implementation of cost-reflective tariffs for select consumer categories has reportedly led to increased supply reliability and reduced energy costs for industrial consumers.

“Industry revenue has increased by 70 per cent to ₦1.7 trillion in 2024 compared to the previous year,” the minister disclosed. “We expect the revenue to exceed ₦2 trillion in 2025 as reforms continue to take root.”

The improved revenue performance, he explained, reflects growing efficiency and investor confidence—two key components in achieving a self-sustaining electricity market. These reforms, combined with the new bond initiative, signal a strong government commitment to resolving long-standing financial and operational bottlenecks in Nigeria’s power sector.

Infrastructure Expansion and Modernisation Efforts

Beyond financial reforms, the government is prioritising infrastructure upgrades to modernise Nigeria’s national grid. Adelabu referenced the Presidential Power Initiative (PPI) as a cornerstone project for expanding both transmission and generation capacity.

“Under Phase Zero of the PPI, we enhanced transmission capacity, grid stability, and overall system reliability, achieving over 700 megawatts of additional transmission capacity,” he explained.

Contracts for Phase One have already been signed with key international partners—including Siemens Energy, CMEC, Elswedy Electric, and Power China—with financing arrangements in progress. “Phase One is expected to add 7,000 MW of operational capacity to the national grid,” the minister revealed.

In addition to grid expansion, the government is also revamping power generation assets through the rehabilitation of National Integrated Power Projects (NIPP) plants, which are expected to contribute an additional 345 MW to national capacity. Furthermore, Adelabu confirmed that the 700 MW Zungeru Hydropower Plant has been successfully integrated into the national grid, marking a significant milestone in Nigeria’s pursuit of renewable and stable energy sources.

Restoring Investor Confidence Through Reform and Partnership

Adelabu urged private investors, industry stakeholders, and development partners to actively support the government’s reform agenda. He stressed that achieving sustainable industrialisation and uninterrupted power supply would require collective effort and continued collaboration across the public and private sectors.

“This administration is committed to building a power sector that is sustainable, commercially viable, and capable of supporting Nigeria’s industrial growth,” he affirmed.

He added that President Tinubu’s strategy focuses on restoring investor confidence, strengthening regulatory governance, and delivering consistent electricity to households and industries alike.

The ₦4 trillion bond approval represents not just a financial intervention but a strategic move to rebuild credibility in the power market. It is expected to ease cash flow constraints across the generation and gas supply segments, boost energy output, and improve the reliability of supply to end-users.

For years, Nigeria’s electricity sector has been constrained by financial shortfalls, infrastructure deficits, and policy inconsistencies. However, with this decisive intervention, the Federal Government appears set to realign the sector toward long-term stability, efficiency, and growth.

As Adelabu concluded, the government’s ultimate goal is clear: “To make uninterrupted power supply not just an aspiration, but a reality for every Nigerian household and industry.”