President Bola Ahmed Tinubu has approved a ₦3.3 trillion payment plan to settle long-standing debts in Nigeria’s power sector, in a move aimed at improving electricity supply and restoring investor confidence.
The development was disclosed in a statement by presidential spokesperson Bayo Onanuga, who said the decision followed a comprehensive review of legacy debts accrued between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme.
“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement said.
According to the presidency, implementation of the plan is already underway, with 15 power generation companies signing settlement agreements worth ₦2.3 trillion. So far, ₦501 billion has been raised, with ₦223 billion already disbursed.
The Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the initiative is designed to stabilise the entire power value chain and restore confidence across the sector.
“This programme is not just about settling legacy debts. It is about ensuring gas suppliers are paid, power plants remain operational, and the system begins to function more reliably,” she said.
She added that the initiative forms part of broader reforms, including improvements in metering systems and the introduction of service-based tariffs that align electricity costs with the quality of supply.
The government also noted that priority would be given to businesses and industries, stressing the importance of stable electricity in driving economic growth and job creation.
Officials expressed optimism that clearing the debt backlog would improve liquidity in the sector, leading to more stable power generation and enhanced service delivery. The presidency further disclosed that the next phase of the programme, known as Series II, is expected to commence within the current quarter.
Nigeria’s power sector has long faced challenges such as low generation capacity, recurring grid failures, and widespread outages. A 2024 report by Standard Bank estimated that the country loses about $26 billion annually due to electricity shortages, with businesses spending an additional $22 billion on alternative energy sources like generators.