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By Godswill Michael
President Bola Tinubu has approved a ₦3.3trn payment plan to settle longstanding debts in Nigeria’s power sector, in a move aimed at restoring electricity reliability and stabilising the industry.
The approval, contained in a State House press release issued on Saturday, marks the culmination of a final review of legacy obligations under the Presidential Power Sector Financial Reforms Programme. The debts, which accumulated between February 2015 and March 2025, have weighed heavily on the sector’s performance for over a decade.
According to the statement signed by Bayo Onanuga, the verified sum of ₦3.3 trillion represents a “full and final settlement,” designed to ensure a transparent and equitable resolution for stakeholders across the electricity value chain.
Implementation of the plan has already commenced, with 15 power generation companies signing settlement agreements valued at ₦2.3 trillion. The Federal Government has raised ₦501 billion to fund the initiative, out of which ₦223 billion has been disbursed, while additional payments are ongoing.
Explaining the broader implications, the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, said the programme is central to restoring confidence in the sector.
“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 reform effort is part of a wider policy framework that includes improved metering and service-based tariffs, linking electricity payments to supply quality. The government is also prioritising power supply to businesses and industrial users to support economic growth and job creation.
The Presidency noted that as funds flow through the value chain, power generation is expected to stabilise, leading to improved electricity supply for households and businesses. Increased investor confidence and expanded economic activity are also anticipated outcomes of the reform.
Tinubu commended stakeholders involved in resolving the sector’s legacy challenges and confirmed that the next phase of the programme, known as Series II, will commence within the current quarter.