President Bola Tinubu has approved a ₦3.3 trillion repayment plan to clear long-standing debts in Nigeria’s power sector, a move aimed at improving electricity supply and restoring investor confidence.
The approval, announced on Sunday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, followed a comprehensive review of legacy debts accumulated under the Presidential Power Sector Financial Reforms Programme between February 2015 and March 2025. “Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement said.
Implementation of the plan has already begun, with 15 power generation companies signing settlement agreements worth ₦2.3 trillion. So far, the Federal Government has raised ₦501 billion to fund the initiative, of which ₦223 billion has been disbursed, with further payments ongoing.
Highlighting the broader impact of the programme, the President’s Special Adviser on Energy, Olu Arowolo-Verheijen, said the initiative extends beyond debt clearance. “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 added that the plan complements ongoing sector reforms, including improved metering and the introduction of service-based tariffs that link payment to the quality of electricity received. The government is prioritising reliable power supply for homes, businesses, industries, and small enterprises to support job creation, livelihoods, and economic growth.
The presidency noted that settling the debts is expected to enhance liquidity throughout the power value chain, stabilise electricity generation, and improve service delivery. President Tinubu commended stakeholders for their cooperation and announced that the next phase of the initiative, Series II, will begin within the current quarter.
Nigeria’s power sector has long struggled with frequent grid collapses, low generation, and persistent outages affecting homes and businesses. A 2024 report by Africa Trade Barometer estimated that the country loses about $26 billion annually due to power failures, with businesses spending an additional $22 billion on off-grid fuel to offset shortages.
“In Nigeria, surveyed businesses must contend with a national grid that frequently collapses as it fails to meet a daily peak demand nearly four times its generation capacity,” the report noted, underscoring the urgent need for sector reforms.
Tinubu Approves ₦3.3 Trillion Plan to Settle Power Sector Debts and Boost Electricity Supply
