President Bola Tinubu has approved N4tn bond issuance to offset verified outstanding debts owed power generation companies (GenCos) and gas suppliers in furtherance of its current initiatives to improve the nation’s electricity sector and restore investor confidence in the sector.
The Minister of Power, Adebayo Adelabu, made the disclosure at the Expert Forum on ‘Uninterrupted Power: The Industrial Imperative’ organised by the Nigeria Economic Summit Group (NESG) in Abuja.
The minister, who spoke on ongoing reforms by the present administration to boost power supply and make the power sector sustainable and commercially viable, said the bond approval was a component of the broader financial stabilisation plan of the government to offset all legacy liabilities that had been hindering investment and liquidity across the electricity value chain.
He explained: “To stabilise the market, Mr President has approved a N4tn bond to clear verified GenCo and gas supply debts. Alongside this, a targeted subsidy framework is being developed to protect vulnerable households and ensure a sustainable path toward full commercialisation and a viable industry.”
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According to him, government is adopting a multi-pronged approach to reposition the sector for sustainability, efficiency, and growth through legislations, policy reforms, infrastructure development, energy transition, and local content expansion.
Adelabu maintained that the government’s tariff policy reforms had started yielding the desired results, adding that through tariff policy reforms which facilitated the current cost-reflective tariffs for select consumers, supply reliability has improved while reducing energy costs for industries.
This is even as he disclosed that industry revenue had also increased by 70 per cent to N1.7tn in 2024 compared to the previous year, and projected the revenue was expected to exceed N2tn this year
On the benefits of the debt settling of the government, the minister stressed that the offsetting of the debts owed the GenCos would provide relief to the companies and gas suppliers, whose unpaid invoices had crippled generation capacity and operational efficiency of the operators.
While assuring the public that government’s ongoing efforts in infrastructure development, including the Presidential Power Initiative, targeted at expanding generation and transmission capacity across the country would improve electricity supply, Adelabu expressed optimism that government’s collaboration with the private sector and development partners would fast-track the move toward a stable, reliable, and globally competitive power sector.
The minister pointed out that in the area of infrastructure development the Federal Government had introduced targeted national programmes aimed at enhancing the viability, expansion, and modernisation of the national grid.
He expatiated: “Under the phase zero of the Presidential Power Initiative, we enhanced transmission capacity, grid stability, and overall system reliability, with over 700 megawatts of additional transmission capacity already achieved. Under Presidential Power Initiative Phase One, contracts have been signed with Siemens Energy, CMEC, Elswedy Electric, and Power China.
“Financing arrangements are underway to support implementation. Phase one is planned to add 7000 MW of operational capacity to the grid”, the minister assured.
