Tinubu Approves ₦3.3trn Plan to Clear Power Sector Debts

President Bola Tinubu has approved a ₦3.3 trillion payment plan to settle long-standing debts in Nigeria’s power sector, a move aimed at improving electricity supply and boosting investor confidence.

The development was announced in a statement by presidential spokesman Bayo Onanuga, who explained that the decision followed a comprehensive review of legacy debts accumulated between 2015 and 2025 under the Presidential Power Sector Financial Reforms Programme.

According to the government, the ₦3.3 trillion represents a final and verified settlement figure to resolve the liabilities in a transparent manner.

Implementation of the plan has already begun, with 15 power generation companies signing agreements worth ₦2.3 trillion. So far, the Federal Government has raised ₦501 billion for the initiative, with ₦223 billion already disbursed, while further payments are ongoing.

Speaking on the initiative, the President’s Special Adviser on Energy, Olu Arowolo-Verheijen, said the programme is designed not only to clear debts but also to restore confidence in the sector. She noted that ensuring payments to gas suppliers and power firms would help sustain operations and improve electricity reliability.

She added that the effort is part of broader reforms, including improved metering and service-based tariffs, aimed at linking electricity costs to quality of supply and prioritising power for businesses and industries.

The Presidency stated that settling the debts would improve liquidity across the power value chain, leading to more stable electricity generation and better service delivery. Tinubu also confirmed that the next phase of the programme, “Series II,” will begin within the current quarter.

Nigeria’s power sector continues to face challenges such as frequent grid collapses and low generation capacity. A report by Standard Bank estimates that the country loses about $26 billion annually due to electricity shortages, with businesses spending an additional $22 billion on alternative power sources.