Tinubu Approves ₦4 Trillion Bond to Clear Debts Owed to GenCos and Gas Suppliers

President Bola Ahmed Tinubu has approved the issuance of a ₦4 trillion bond to settle longstanding debts owed to power generation companies (GenCos) and gas suppliers across Nigeria. The move is part of the government’s broader plan to address the persistent liquidity crisis in the country’s electricity sector and restore financial stability to the power value chain.

The Minister of Power, Adebayo Adelabu, announced the development during the Expert Forum on “Uninterrupted Power: The Industrial Imperative” in Abuja. He explained that the bond is a strategic step under the administration’s Renewed Hope Agenda to revive the electricity industry, enhance investor confidence, and ensure consistent power supply for both residential and industrial consumers.

According to Adelabu, the debts being cleared were accumulated over several years due to shortfalls in payments by electricity distribution companies (DisCos) and the government’s failure to meet its financial obligations to GenCos. He revealed that the Ministry of Power, in collaboration with the Ministry of Finance, conducted a thorough verification process to confirm the authenticity of all debt claims before President Tinubu’s approval. Only verified and legitimate obligations will be covered by the bond, ensuring transparency and accountability in the disbursement process.

Adelabu noted that the bond issuance would immediately improve cash flow in the electricity sector, allowing GenCos and gas suppliers to maintain operations, pay their contractors, and sustain investments in power generation capacity. He also emphasized that the move will help stabilize the country’s power supply chain, which has been severely weakened by the growing backlog of unpaid invoices.

The Minister added that the government is also developing a new targeted subsidy mechanism to protect low-income consumers from the impact of tariff adjustments. He stressed that while electricity pricing must reflect the true cost of production, the administration is determined to shield the most vulnerable households from excessive costs.

Nigeria’s power sector has long struggled with liquidity problems that have threatened its sustainability. Reports indicate that as of mid-2025, GenCos were owed more than ₦5 trillion in unpaid invoices, while monthly market shortfalls averaged around ₦200 billion. This funding gap has made it difficult for operators to maintain plants, procure gas, and invest in system upgrades. The ₦4 trillion bond is expected to ease these challenges by restoring balance to the financial structure of the sector.

Industry analysts have described the move as a welcome development that could help reduce power outages and strengthen investor confidence. They, however, cautioned that for the bond to have the desired effect, it must be backed by strong regulatory oversight and transparent implementation. They also urged the government to ensure that future market payments are managed efficiently to avoid a recurrence of debt accumulation.

Adelabu further disclosed that the government’s long-term plan goes beyond debt repayment. It includes modernizing transmission infrastructure, expanding the country’s generation capacity, and promoting local content in energy production. He noted that the Ministry of Power is working closely with other key ministries and agencies to drive reforms that will make Nigeria’s electricity supply more reliable and sustainable.

The Minister said recent tariff adjustments had already improved revenue collection for distribution companies, helping to strengthen their liquidity. Combined with the bond repayment, these reforms are expected to create a more efficient and financially viable power market. He maintained that the government’s ultimate goal is to deliver uninterrupted electricity to households and industries, thereby stimulating economic growth and job creation.

Stakeholders in the energy industry, including operators, investors, and consumers, have welcomed the decision, viewing it as a strong signal of the government’s commitment to resolving structural issues in the sector. Many believe the ₦4 trillion bond, if well-managed, will serve as a turning point for Nigeria’s power industry, helping to unlock fresh investments and restore confidence among local and international partners.

With the President’s approval now secured, the Ministry of Finance and the Debt Management Office are expected to work out the modalities for issuing the bond in the coming weeks. Once executed, it is anticipated that the initiative will not only clear outstanding liabilities but also pave the way for a new era of financial discipline, efficiency, and sustainability in Nigeria’s power sector.