The Presidency has clarified the controversy surrounding President Bola Tinubu’s approval of a ₦3.3 trillion debt settlement plan for Power Generation Companies (GenCos), stating that the initiative is part of a structured reform programme aimed at restoring stability to Nigeria’s power sector.
In a statement issued on Thursday, the Presidency explained that the repayment plan covers verified legacy debts owed to GenCos between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme.
According to the statement signed by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the programme is designed to stabilise the national power grid, improve electricity supply, and restore liquidity across the electricity value chain.
The statement noted that implementation of the settlement plan has already commenced, with ₦223 billion already disbursed to GenCos and gas suppliers, while an additional ₦197 billion is currently being processed, largely to settle gas-related obligations.
The clarification follows concerns raised by GenCos over the basis for arriving at the ₦3.3 trillion figure, with industry operators questioning discrepancies between the approved amount and figures earlier agreed during reconciliation meetings involving stakeholders and government agencies.
Responding to the concerns, the Presidency said the intervention is not intended as a reward but a carefully verified settlement process focused strictly on legitimate obligations backed by contracts and service delivery records.
“The Federal Government of Nigeria is implementing a structured and balanced reform programme to address longstanding financial challenges in the power sector.
“At the core of this effort is a market-based settlement mechanism designed to restore the sector, not reward accumulated claims that extend beyond verifiable service delivery. The objective is to ensure fairness to operators while also protecting the interest of the Nigerian public,” the statement said.
The Presidency disclosed that the power sector had accumulated approximately ₦4.7 trillion in claims between 2015 and 2025.
It explained that during a presidential stakeholders’ meeting held in July 2025, the total claims were presented to President Tinubu, who subsequently directed a comprehensive review of the figures.
Following the review, the Federal Executive Council on August 15, 2025, approved a fiscal cap of ₦4 trillion to guide the verification process.
The exercise, according to the statement, led to a 30 per cent reduction in the claims, bringing the final negotiated and verified settlement figure to ₦3.3 trillion.
The Presidency stressed that the reduction reflected the elimination of unverified and unsupported claims, leaving only valid obligations tied to contractual agreements and actual service delivery.
To ensure sustainability and reduce pressure on public finances, the government said the settlement is being executed through a phased, market-based financing framework.
It added that Series I of the programme, valued at about ₦1.23 trillion, is currently being implemented.
Under the first phase launched in January 2026, ₦501 billion was raised from the domestic capital market as part of the power sector debt resettlement bond.
On implementation progress, the statement revealed that as of January 8, 2026, five GenCos operating 14 power plants had signed settlement agreements worth approximately ₦827 billion.
By March 31, 2026, the number had risen to 17 GenCos — comprising two public and six private companies — covering 17 power plants with agreements valued at about ₦2.28 trillion.
The Presidency described the growing number of signatories as evidence of increasing alignment and participation within the sector.
It further stated that the debt settlement is being implemented alongside wider reforms aimed at strengthening the electricity market, including targeted support for poor and vulnerable households and tariff adjustments that align higher service bands with cost-reflective pricing.
According to the government, the broader objective is to restore liquidity, stabilise electricity generation, improve supply reliability, and reposition the sector for long-term sustainability.
The statement emphasised that the intervention is not a one-off payment but a comprehensive effort to rebuild the financial and operational foundations of Nigeria’s power industry.
“The Federal Government remains committed to ensuring that the reforms deliver a stable, reliable, and investable electricity market for the benefit of all Nigerians,” it added.
The clarification comes after the Chief Executive Officer of the Association of Power Generation Companies of Nigeria (APGC), Joy Ogaji, raised concerns over the parameters used in arriving at the ₦3.3 trillion verified debt figure.
Ogaji had argued that GenCos were not adequately carried along in the verification process, thereby fuelling uncertainty within the sector.
The controversy also follows the recent announcement of a ₦501 billion power sector debt resettlement bond by the Federal Government.
Presidency Clarifies ₦3.3tn GenCo Debt Settlement Plan, Says Payments Based on Verified Claims
