By Deborah Nnamdi
President Bola Tinubu has approved a N3.3 trillion payment plan to settle long-standing debts in Nigeria’s power sector, a move aimed at improving electricity supply and restoring investor confidence.
The development was disclosed in a statement issued on Sunday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, who said the approval followed a final review of legacy debts accumulated under the Presidential Power Sector Financial Reforms Programme over a 10-year period from February 2015 to March 2025.
According to the statement, the agreed sum represents a full and final settlement after verification, ensuring what the government described as a fair and transparent resolution of outstanding obligations in the sector.
Implementation of the repayment plan has already commenced, with 15 power generation companies signing settlement agreements valued at ₦2.3 trillion. The Federal Government has so far raised ₦501 billion to fund the initiative, out of which ₦223 billion has been disbursed, while further payments are ongoing.
The Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the initiative is designed not only to clear debts but also to stabilise the sector and restore confidence among stakeholders.
She noted that the programme would ensure gas suppliers are paid, power plants remain operational, and electricity supply becomes more reliable across the country. She added that the plan forms part of broader reforms, including improved metering and service-based tariffs that align electricity costs with the quality of supply.
Arowolo-Verheijen also said the government is prioritising power supply to businesses, industries, and small enterprises, stressing that reliable electricity is essential for job creation, economic growth, and improved livelihoods.
The presidency stated that clearing the debts would enhance liquidity across the power value chain, leading to more stable electricity generation and improved service delivery nationwide.
President Tinubu commended stakeholders for their roles in addressing the long-standing issues and confirmed that the next phase of the programme, known as Series II, will commence within the current quarter.
Nigeria’s power sector has long been plagued by challenges, including frequent grid collapses, low generation capacity, and persistent outages affecting households and businesses. A 2024 report by Standard Bank indicated that the country loses an estimated $26 billion annually due to electricity shortages, with businesses spending an additional $22 billion on off-grid fuel to cope with unreliable supply.
