Nigeria’s struggling power sector is poised for a transformative recovery following President Bola Tinubu’s approval of a ₦4 trillion bond program aimed at clearing longstanding debts owed to power generation companies (GENCOs). This landmark financial initiative, announced in mid-2025, seeks to inject critical liquidity into the industry, which has grappled with disrupted electricity supply due to unresolved financial liabilities accrued between 2015 and 2023.
The ₦4 trillion debt package targets verified and legitimate claims against GENCOs, with ₦1.8 trillion already validated by the Nigerian Bulk Electricity Trading Company (NBET) and an additional ₦200 billion related to unpaid subsidy shortfalls. The remaining balances are under rigorous audit to ensure transparency and accountability in fiscal disbursements.
The power sector’s liquidity crisis has long hindered investment and growth, causing frequent power outages and eroding investor confidence. By addressing these debts, the government expects to stabilize operations of power plants, avoid forced asset liquidations, and encourage private sector participation in electricity generation.
Minister of Power, Chief Adebayo Adelabu, highlighted ongoing reforms including the implementation of the Electricity Act 2023, decentralization of market operations, and the Presidential Metering Initiative distributing over 300,000 smart meters to consumers. These efforts have already contributed to revenue growth in the sector, increasing from ₦1 trillion in 2023 to ₦1.7 trillion in 2024 despite past challenges.
Beyond financial relief, President Tinubu’s program signals a commitment to reform-driven governance. By coupling bond issuance with stringent audits, the administration aims to eradicate inefficiencies and waste within the sector, setting a new standard for financial discipline in public utilities.
This ₦4 trillion bond initiative is more than a bailout—it is a strategic reboot designed to unlock Nigeria’s vast industrial potential. Reliable electricity supply remains a cornerstone for economic growth, job creation, and improved quality of life for millions of Nigerians. The government’s bold move offers renewed hope that years of power sector stagnation may soon give way to stability, increased generation capacity, and improved service delivery.
Nigeria’s power crisis has been a key constraint on its economic expansion, costing billions annually in lost productivity. By harnessing capital markets and enforcing transparency, the bond program positions the country as a proactive leader in African infrastructure reform. It also offers a blueprint for other sectors burdened with fiscal arrears.
While challenges remain, including gas supply shortfalls and transmission inefficiencies, the bond program lays a critical foundation for sustained progress. Nigeria’s power sector is embarking on a new chapter—one that promises a future where electricity is more reliable, affordable, and accessible for all.
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