President Bola Tinubu has approved a N4 trillion bond program to clear the longstanding and verified debts owed to power Generation Companies (GenCos) and gas suppliers, in a bid to stabilize Nigeria’s chronically illiquid electricity sector.
The approval, which is considered a critical step in addressing legacy liabilities dating back to 2015, was disclosed by the Minister of Power, Chief Adebayo Adelabu, at an expert forum in Abuja.
”To stabilize the market, Mr. President has approved a N4tn bond to clear verified GenCo and gas supply debts,” Minister Adelabu stated, outlining the financial component of the Federal Government’s Renewed Hope Agenda for the sector.
Commitments and Caveats
The N4 trillion figure represents the total exposure the Federal Government is currently carrying, accumulated over years due to unfunded tariff and market shortfalls.
However, the administration emphasized that the bond issuance, which will be led by the Debt Management Office (DMO), is subject to a rigorous verification process. The Special Adviser to the President on Energy, Ms. Olu Verheijen, previously confirmed the debt claim would undergo a thorough audit.
President Tinubu stressed the need for fairness and transparency during the verification process, though he acknowledged the inherited burden. He appealed to the GenCos and their financial backers for patience:
“I accept the assets and liabilities of my predecessors, and there is no question about that. But that acceptance must be on credible grounds. I must confirm the figures are authentic.”
The Minister of Power further highlighted that the proposed debt clearance is essential, as the unpaid invoices have long crippled generation capacity and operational efficiency, thereby hindering investment and liquidity across the electricity value chain.
The implementation of the bond program is expected to provide necessary relief and restore investor confidence, supporting the government’s recent tariff policy reforms which have already resulted in improved supply reliability for certain consumers.
Nigeria Eyes Bond To Pay Off N4 Trillion Genco Debt. This video provides additional context and analysis regarding the financial implications of Nigeria’s N4 trillion power sector debt and the proposed bond solution.
