In what is being termed as a bold move toward reviving the power supply chain, the Federal Government has started a systematic strategy to erase the enormous ₦4 trillion debt owed to Nigeria’s power generating companies.
Officials claim that this action will help the industry to be financially stable and provide power to millions of households and companies.
After the most recent Federal Executive Council meeting presided over by President Bola Tinubu, Wale Edun, Finance Minister and Coordinating Minister of the Economy, revealed this. He said that the debt settlement would be carried out under a refinancing plan, which could include distributing a bond to pay off the due obligations. This approach mostly substitutes one kind of debt with another but under more reasonable repayment conditions.
The News Chronicles understands that the large backlog has stressed the operations of the generation businesses and therefore have been a long-standing problem for them. Industry experts contend that the unpaid invoices have interfered with maintenance programs, lowered capacity for investment, and endangered the financial viability of some power plants. The government’s immediate action is meant to rebuild operator confidence and possibly spur new investments in the industry.
Although the funding plan was just partially approved, Edun verified that the Debt Management Office and financial experts are leading implementation efforts already underway.Within one month the first phase of the debt resolution plan is scheduled to be finished.The minister says resolving these debts will be a game-changer for Nigeria’s power supply, so eliminating one of the most long-lasting bottlenecks in the industry.
Besides the power sector changes, the finance ministry obtained Federal Executive Council approval to go with a $125 million loan from the Islamic Development Bank.Among important road projects in Abia State, the facility will fund a 35-kilometer stretch in Umuahia and a 126-kilometer road in Aba, the state’s commercial center. These initiatives aim to stimulate the economy, enhance connectivity, and make it easier for goods and people to move inside the area.
The government is indicating a dual emphasis on stabilizing vital services and promoting expansion by addressing inherited debts and investing in infrastructure. Should they be completely put into effect, the policies might reflect a major increase in economic competitiveness as well as in power reliability.
