President Bola Tinubu has approved a ₦3.3 trillion payment plan aimed at settling long-standing debts in Nigeria’s power sector, in a move the Federal Government says will improve electricity reliability and restore investor confidence.
The approval, announced in a State House press release on Sunday by presidential spokesman Bayo Onanuga, follows what officials described as a final review of legacy debts accumulated over a decade.
According to the statement, the debts—incurred between February 2015 and March 2025—have been a major constraint on the performance of the electricity value chain. After verification, the government agreed on ₦3.3 trillion as a “full and final settlement,” describing it as a fair and transparent resolution.
Implementation of the plan is already underway. The presidency disclosed that 15 power generation companies have signed settlement agreements valued at ₦2.3 trillion. So far, the Federal Government has raised ₦501 billion to kick-start the process, with ₦223 billion already disbursed and additional payments ongoing.
Officials say the intervention is expected to stabilise electricity generation by ensuring that key players in the sector, including gas suppliers and power plants, receive payments owed to them.
“This programme is not just about settling legacy debts. It is about restoring confidence across the power sector — ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably,” said Olu Arowolo-Verheijen.
She added that the initiative forms part of broader reforms being implemented in the sector, including improvements in electricity metering and the introduction of service-based tariffs.
“It is part of a broader set of reforms already underway — including better metering and service-based tariffs that link what you pay to the quality of electricity you receive,” she said.
Arowolo-Verheijen further noted that the government is prioritising power supply to businesses and industries, stressing that reliable electricity is essential for job creation and economic growth.
“The government is also prioritising power supply to businesses, industries, and small enterprises because reliable electricity is critical to creating jobs, supporting livelihoods, and growing the economy,” she said.
She emphasised that the ultimate goal of the programme is to deliver improved outcomes for Nigerians.
“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” she added.
President Tinubu also commended stakeholders involved in resolving the sector’s long-standing financial challenges and confirmed that the next phase of the programme, known as Series II, will commence within the current quarter.
The government expressed optimism that the debt settlement plan will unlock fresh investments into the power sector and set Nigeria on the path to more stable and reliable electricity supply.