By Faridat Salifu
President Bola Tinubu has given his consent in principle to a proposed ₦4 trillion bond programme aimed at clearing legacy debts owed to power generation companies (GENCOs), in a move designed to stabilise Nigeria’s electricity market and unlock new investment.
The Special Adviser to the President on Energy, Olu Verheijen, disclosed this last Thursday during a high-level meeting with the Association of Power Generation Companies (APGC) at the Presidential Villa in Abuja.
She explained that the bond initiative, which has received the President’s anticipatory support, seeks to address a liquidity shortfall that has persisted for over a decade due to unfunded tariff gaps and accumulated market shortfalls.
“As of April 2025, the federal government is carrying a verified exposure of ₦4 trillion in debts to GENCOs, an accumulation dating back to 2015,” Verheijen said, noting that ₦1.8 trillion of the claims have already been validated by the Nigerian Bulk Electricity Trading Company (NBET).
She stressed that while the President had given early consent to the bond programme, the figure remains subject to final validation and negotiation.
“Only debts that are fully verified will be included in the issuance by the Debt Management Office (DMO),” Verheijen clarified.
President Tinubu reaffirmed his administration’s commitment to resolving longstanding liabilities in the power sector transparently, but urged GENCOs and financial institutions to allow time for credible audits and legal reviews.
“I accept the assets and liabilities of my predecessors, but that acceptance must be based on verifiability and authenticity,” the President said.
He called for patience from energy stakeholders and discouraged extreme enforcement measures such as foreclosures.
“To our friends in the banking sector, I ask that we avoid foreclosures. Sharpen your pencils, but keep an eraser handy. Let’s persevere together,” he said.
The Minister of Power, Adebayo Adelabu, welcomed the bond proposal as critical to preserving gains made under the Tinubu administration’s power reforms, which include the Electricity Act 2023, the first Integrated National Electricity Policy in 24 years, and increased private capital inflows exceeding $2 billion.
Adelabu warned that the sector’s growing liquidity crisis could undermine stability, reduce electricity output, and risk shutdowns of generation assets.
“This debt overhang has grave implications, and we humbly seek your support for defraying it over a defined period,” he said.
Business leaders Tony Elumelu and Kola Adesina echoed the urgency of intervention, saying the GENCOs’ heavy indebtedness to banks poses a serious threat to Nigeria’s energy security.
“Power is critical to unlocking Nigeria’s full potential. We urge you to help solve this debt problem,” Elumelu said.
He also praised the administration’s broader reforms, including oil revenue recovery and banking sector stability.
Adesina highlighted worsening gas supply constraints and proposed unlocking 800 million cubic feet of gas through the Nigeria LNG to boost generation, especially in the Afam axis.
The high-level session was attended by top government officials including the Chief of Staff, Femi Gbajabiamila; Finance Minister Wale Edun; Information Minister Mohammed Idris; and other sector regulators and stakeholders.
