Tinubu Approves ₦4 Trillion Bond to Address GENCOs Debt
President Bola Tinubu has approved a ₦4 trillion bond programme to offset debts owed to electricity generation companies (GENCOs), calling for patience from the operators as the federal government works to verify and validate all outstanding claims.
The announcement came during a meeting with the Association of Power Generation Companies, led by Sani Bello, at the Presidential Villa in Abuja.
Presidential spokesperson Bayo Onanuga stated that the President reaffirmed his commitment to solving the liquidity issues afflicting the power sector. Special Adviser on Energy, Olu Verheijen, disclosed that the bond programme has received anticipatory presidential approval to tackle the sector’s funding shortfall.
The President, acknowledging the historical liabilities carried over from previous administrations, stressed the importance of accuracy in validating the debt figures.
“I accept the assets and liabilities of my predecessors, and there is no question about that. But that acceptance must be on credible grounds. I need to wear the audit cap of verifiability, authenticity, and the fact that this inheritance is not a mere deodorant but a support structure for critical economic and industrial promotion.”
He urged GENCOs and financial institutions to allow time for due diligence and verification.
“We are here. So, market it to your other colleagues. Give us time to do verification and validation of the numbers,” he said.
President Tinubu reiterated his administration’s belief in a market-based electricity sector and highlighted the steps taken to redirect subsidies and promote alternatives like Compressed Natural Gas (CNG).
“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 called electricity “the most important discovery of humanity in the last 1,000 years” and stressed its role in economic development and national dignity.
Verheijen explained that the sector’s liquidity problem stems from over a decade of accumulated market and tariff shortfalls. She reported that verified government debt to GENCOs stands at ₦4 trillion as of April 2025, though this figure may change as the final audit progresses.
“While there is an anticipatory approval of this ₦4 trillion bond programme, it is subject to negotiations and final settlement of agreements. Only the amounts that the federal government validly owes are the things that will make it into the issuance by DMO,” she explained.
Power Minister Adebayo Adelabu praised the President’s interventions, noting significant reforms including the signing of the Electricity Act, 2023 and Nigeria’s first Integrated National Electricity Policy in over two decades.
He highlighted that private sector investment of over $2 billion has been attracted since the reforms began, boosting generation capacity from 13,000 MW to 14,000 MW. Adelabu also cited an increase in energy delivery, the elimination of national grid collapses in 2025, and the deployment of 300,000 smart meters under the ₦700 billion Presidential Metering Initiative.
However, the minister warned that the sector faces a financial crisis that could derail progress if the government fails to intervene promptly.
“Mr. President, given the grave implications of this debt overhang, including the risk of a nationwide shutdown of generation assets, I humbly seek your immediate support for defraying these obligations, even if partially, over a defined period,” he appealed.
Prominent private sector leaders, including Tony Elumelu and Kola Adesina, echoed the minister’s concerns.
“Mr. President, we’ve come to you as a last hope. The generating companies are heavily indebted to banks, and foreclosure threats are real, not because we’re not doing our jobs, but because the system owes us trillions,” Elumelu said.
He applauded the administration’s success in restoring oil production and stabilising the financial system.
“Before you took office in 2023, we lost 97% of our daily oil production. Today, we are retaining 98%. That’s transformation. Investors are seeing greater stability and predictability,” he said.
On power generation, Elumelu added: “We don’t need power to complete your transformation, we need power to enable it. Power is critical to unlocking Nigeria’s full potential. We urge you to help solve this debt problem.”
Adesina called for swift liquidity support and noted the effects of gas shortages on power production.
“Liquidity is the oxygen of our business. Without urgent intervention, generation capacity will stall, and Nigeria’s industrial and economic ambitions will be jeopardised.
“The plants in the Afam axis are underperforming because we have not paid gas suppliers. We propose unlocking 800 million cubic feet of gas through NLNG to boost supply to these power plants,” he said.
The meeting was attended by high-ranking officials, including the Chief of Staff, Femi Gbajabiamila; Finance Minister Wale Edun; Information Minister Mohammed Idris; and regulators and stakeholders across the power sector.
