President Bola Tinubu has approved a ₦3.3 trillion settlement plan aimed at resolving long-standing debts in Nigeria’s power sector under the Presidential Power Sector Financial Reforms Programme.
The development was confirmed in a statement issued by his spokesperson, Bayo Onanuga, on Sunday.
The initiative follows a comprehensive review of legacy debts accumulated between February 2015 and March 2025. The government believes the move will stabilise electricity generation and improve overall service delivery across the country.
Implementation is already underway, with stakeholders within the electricity value chain beginning to receive payments.
What the Government Says
According to officials, the programme is not just about clearing debts but also restoring trust and efficiency in the power sector.
Olu Arowolo-Verheijen, Special Adviser on Energy to the President, explained that the effort is designed to ensure gas suppliers are paid, power plants remain operational, and electricity supply becomes more reliable.
She added that the reforms are part of a broader strategy that includes improved metering systems and service-based tariffs tied to electricity quality. The government is also prioritising power supply to businesses and industries to boost economic growth and job creation.
Key Details
- The ₦3.3 trillion represents the agreed final settlement for verified legacy debts.
- Around 15 power generation companies have already signed agreements worth about ₦2.3 trillion.
- The Federal Government has secured ₦501 billion to kick-start the payments.
- Out of this, ₦223 billion has already been disbursed, with more payments ongoing.
Authorities believe injecting funds into the sector will enhance generation capacity and improve electricity reliability nationwide.
Background
Nigeria’s power sector has struggled for years with liquidity challenges, with generation companies (GenCos) facing an estimated ₦6.8 trillion debt burden. This has affected their ability to maintain infrastructure and secure gas supply, leading to reduced output.
In 2025, the government also proposed a ₦4 trillion bond to address outstanding obligations, though concerns were raised by stakeholders over the sustainability of such debt strategies.
Overall, the new settlement plan is part of wider reforms aimed at building a more stable and efficient power sector for Nigerians.