FG, GenCos reach agreement on settlement of N4trn power sector debt
The Federal Government has finalized implementation plans for a ₦4 trillion government-backed bond to settle verified debts owed to power Generation Companies (GenCos) and gas suppliers.
Presidential Adviser on Energy, Mrs. Olu Verheijen, disclosed this in a statement on Tuesday in Abuja. She noted that the agreement followed a high-level meeting between government officials and senior GenCos executives to review modalities for clearing the outstanding liabilities.
According to Verheijen, the meeting ended with a consensus on the next steps, including bilateral negotiations to finalize comprehensive settlement agreements. She added that the government remains committed to balancing fiscal realities with the financial pressures confronting the GenCos.
The approved plan, which received endorsement from the Federal Executive Council (FEC) in August 2025, authorises the issuance of up to N4 trillion in government-backed bonds. This intervention, described as the largest in over a decade, is designed to address a legacy debt overhang that has severely constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country.
As of April 2025, the Federal Government’s verified exposure in debts to GenCos, an accumulation dating back to 2015, stood at N4 trillion.
