Bola Tinubu has approved a ₦3.3 trillion payment plan to settle long-standing debts in Nigeria’s power sector, a step aimed at improving electricity supply and restoring investor confidence.
The development was disclosed in a statement by presidential spokesperson Bayo Onanuga, who noted that the decision followed a review of legacy debts accumulated 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.
The government confirmed that implementation has already commenced. So far, 15 power generation companies have signed settlement agreements valued at ₦2.3 trillion, while ₦501 billion has been secured, with ₦223 billion already disbursed.
Speaking on the initiative, the Special Adviser on Energy to the President, Olu Arowolo-Verheijen, explained that the plan is designed to stabilise the entire electricity value chain. “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,” she said.
She further highlighted that the initiative is part of broader reforms, including improvements in 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.
The government also emphasised that businesses and industries will be prioritised, given the importance of stable power supply to economic growth and job creation. “The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” Arowolo-Verheijen added.
Officials believe clearing the backlog of debts will improve liquidity within the sector, leading to more stable electricity generation and improved service delivery. The presidency also revealed 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, frequent grid failures, and widespread outages. A 2024 report by Standard Bank estimated that the country loses about $26 billion annually due to electricity shortages, while businesses spend an additional $22 billion on alternative power sources like generators.