The Federal Government has commenced the process of settling ₦4 trillion in outstanding debts owed to Power Generation Companies (Gencos) with plans for a refinancing arrangement that could involve raising a bond to clear the obligation.
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, disclosed the plan while briefing State House correspondents after Wednesday’s Federal Executive Council (FEC) meeting presided over by President Bola Tinubu.
Edun said he presented a memo seeking approval to refinance the debt, which has long strained the operations of Gencos and affected electricity supply stability.
Although the financing plan was only partially approved, he confirmed that implementation — to be led by the Debt Management Office (DMO) in collaboration with other experts — has begun.
“Though the financing plan was not fully approved, we have moved into implementation. The first phase should be completed within three to four weeks,” Edun stated, adding that the initiative is expected to significantly improve liquidity in the power sector and support generation capacity.
$125 Million Islamic Development Bank Loan for Abia Infrastructure
The minister also announced that the FEC considered and approved a $125 million loan from the Islamic Development Bank to finance critical road infrastructure in Abia State.
According to Edun, the facility will be used to construct a 35-kilometre road in Umuahia, the state capital, and a 126-kilometre road in Aba, the commercial hub of the state.
“When fully implemented, the projects will expand road infrastructure and ease movement across the affected communities in Abia State,” he noted.
The debt settlement plan for Gencos and the Abia road project financing are part of the Tinubu administration’s broader efforts to stabilise critical sectors, address longstanding liabilities, and stimulate economic activity through targeted infrastructure investments.
