The federal government is taking decisive steps to clear the N4 trillion debt owed to power generation companies (GenCos), Finance Minister and Coordinating Minister of the Economy, Wale Edun, announced on Wednesday.
Speaking to state house correspondents after the Federal Executive Council (FEC) meeting presided over by President Bola Tinubu, Edun revealed that he submitted a proposal to refinance outstanding obligations in the electricity sector, amounting to N4 trillion.
“I presented a memo on the all-important refinancing of the electricity sector’s outstanding obligations totaling N4 trillion,” Edun said. “While the financing plan has not been fully approved immediately, we have already begun implementation, led by the Debt Management Office and other experts.”
He added that the first phase of the process is expected to be completed within three to four weeks, signaling significant progress toward resolving the long-standing debt crisis in the power sector.
Refinancing, explained Edun, involves replacing existing debt with new obligations, effectively providing the government with the means to pay off the GenCos’ outstanding balances.
The debt, which GenCos flagged in April 2025 as a threat to their operations, includes N2 trillion for 2024 and N1.9 trillion in legacy obligations.
Earlier in May, Minister of Power Adebayo Adelabu had suggested that part of the debt might be settled through new government borrowing.
In addition to addressing power sector challenges, Edun disclosed that the federal government is seeking $125 million from the Islamic Development Bank (IsDB) to fund critical infrastructure projects in Abia State.
The loan will finance the construction of 35 kilometres of roads in Umuahia and 126 kilometres in Aba, improving transportation efficiency and stimulating regional economic activity.
“Infrastructure support from the IsDB will enhance key road networks connecting Umuahia and Aba, boosting transport efficiency and economic development,” Edun said.
