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President Bola Tinubu has approved a sweeping ₦3.3 trillion payment plan aimed at resolving long-standing debts in Nigeria’s troubled power sector, marking one of the most ambitious financial interventions in over a decade.
The initiative, anchored under the Presidential Power Sector Financial Reforms Programme, follows a comprehensive review of liabilities accumulated between February 2015 and March 2025.
After verification, the government agreed on ₦3.3 trillion as a full and final settlement, an effort designed to bring transparency and closure to a debt overhang that has constrained electricity generation and supply nationwide.
Fifteen power generation companies have already signed settlement agreements worth ₦2.3 trillion, while the government has mobilised ₦501 billion to kick-start the process. Of this, ₦223 billion has been disbursed, with further payments ongoing. The expectation is that settling these obligations will unlock liquidity across the power value chain, enabling generation companies to operate more efficiently and consistently.
For Nigerians, the implications could be significant. Improved cash flow to power plants is expected to stabilise electricity generation, reduce outages, and enhance overall reliability. The government also anticipates that restoring financial confidence in the sector will attract fresh investment, stimulate job creation, and ultimately improve service delivery.
According to Olu Arowolo-Verheijen, Special Adviser on Energy to the President, the initiative goes beyond debt repayment.
“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, adding that the plan is part of broader reforms, including improved metering and service-based tariffs that link electricity costs to the quality of service.
The administration is also prioritising power supply to businesses and small enterprises, recognising electricity as a critical driver of economic growth.
“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians.”Arowolo-Verheijen noted,
President Tinubu has praised stakeholders for their role in addressing the sector’s legacy challenges and confirmed that the next phase of the programme will commence later this quarter, signalling continued momentum in the push to stabilise Nigeria’s electricity landscape.
