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The Presidency on Thursday addressed the controversy surrounding the approval of a ₦3.3 trillion plan by President Bola Tinubu to settle verified legacy debts owed to Power Generation Companies (GenCos) between February 2015 and March 2025.
The initiative, under the Presidential Power Sector Financial Reforms Programme, is intended to stabilise the national grid and enhance electricity supply, with ₦223 billion already released.
In a statement issued on Sunday, the Special Adviser to the President on Information and Strategy, Bayo Onanuga, confirmed that implementation of the repayment plan is underway, with 15 power plants having signed settlement agreements amounting to ₦2.3 trillion.
However, the approval triggered concern among GenCos, which urged the President to clarify how the Nigerian Government arrived at the reported ₦3.3 trillion figure, citing discrepancies with reconciled industry records.
They questioned the basis of the calculation, noting that it did not align with figures previously agreed during reconciliation exercises involving market participants and government agencies.
In response, the Presidency stated that the debt settlement is designed to tackle financial challenges in the power sector rather than serve as a reward beyond actual service delivery.
“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.
“Between 2015 and 2025, the sector accumulated approximately ₦4.7 trillion in claims across the electricity value chain.
“Following a Presidential stakeholder meeting in July 2025, where the claims of N4.7trillion were presented, a thorough review was recommended by President Bola Tinubu. On August 15, 2025, a ₦4 trillion fiscal cap was approved by the Federal Executive Council, following which a comprehensive verification process was undertaken to verify claims.
“This resulted in a 30 percent reduction in claims, leading to a final negotiated settlement of ₦3.3 trillion, reflecting only valid and contract-backed obligations.
‘To ensure sustainability and avoid fiscal pressure, the settlement is being implemented through a phased, market-based financing framework”, the statement read in part.
The Presidency disclosed that the first programme series, estimated at ₦1.23 trillion, is being implemented, adding that disbursement under Series I, Phase I (January 2026), involving ₦501 billion raised from the domestic capital market, is already in progress.
It confirmed that ₦223 billion has been disbursed to GenCos and gas suppliers, while ₦197 billion is being processed, largely for gas-related obligations.
All payments, it noted, are phased and conditional on verified claims, signed agreements, and completed documentation.
On implementation progress, the Presidency explained that as of 8 January 2026, five GenCos covering 14 power plants had signed agreements worth about ₦827 billion. By 31 March 2026, the number had increased to 17 GenCos—eight public and six private—covering 17 plants and valued at approximately ₦2.28 trillion.
“This reflects growing alignment and participation across the sector.
“The financial settlement is also being implemented alongside broader reforms designed to strengthen the sector, including targeted support to ensure affordability for poor and vulnerable households and tariff reforms aligning higher service bands with cost-reflective pricing to support investment and improve service delivery.
“The programme is designed to restore liquidity, stabilise generation, improve reliability, and reposition the sector for long-term sustainability.
“It also reflects a shift from unverified claims to disciplined, transparent, and market-backed obligations.”
The Presidency emphasised that the initiative is not a one-off intervention but a structured effort to reset the financial and operational foundations of Nigeria’s power sector.
“The Federal Government remains committed to ensuring that the reforms deliver a stable, reliable, and investable electricity market for the benefit of all Nigerians,” the statement added.
Meanwhile, the Chief Executive Officer of the Association of Generation Companies of Nigeria (APGC), Joy Ogaji, raised concerns about the parameters used to determine the ₦3.3 trillion verified debt, stating that GenCos were not adequately consulted.
The controversy comes amid the Nigerian Government’s recently announced ₦501 billion power-sector debt resettlement bond.
