President Bola Tinubu has approved a comprehensive payment plan aimed at resolving long-standing debts in Nigeria’s power sector, a move expected to restore confidence, improve electricity supply, and stimulate broader economic activity across the country.
The debt repayment initiative, part of the Presidential Power Sector Financial Reforms Programme, addresses legacy liabilities accumulated between February 2015 and March 2025. Following a detailed verification process, a total of ₦3.3 trillion was agreed as a full and final settlement to clear outstanding obligations in the sector.
Implementation of the plan has already begun, with 15 power plants signing settlement agreements worth ₦2.3 trillion. The Federal Government has so far raised ₦501 billion to support the payments, with ₦223 billion already disbursed and additional payments currently underway.
The initiative is expected to have significant social and economic impact. By ensuring that power plants and gas suppliers are paid, the government aims to stabilize electricity generation, reduce operational disruptions, and improve overall service delivery. A more reliable power supply is also expected to support households, enhance productivity, and strengthen business operations nationwide.
According to Olu Arowolo-Verheijen, Special Adviser on Energy to the President, the programme goes beyond debt settlement. It is designed to rebuild trust within the power sector and ensure that key players across the value chain can operate more effectively. She noted that ongoing reforms, including improved metering systems and service-based tariffs, are intended to align electricity costs with service quality while encouraging efficiency.
The government is also prioritizing electricity supply to businesses, industries, and small enterprises, recognizing the critical role of reliable power in driving job creation, supporting livelihoods, and fostering economic growth.
President Tinubu commended stakeholders who contributed to resolving the sector’s legacy challenges and confirmed that the next phase of the programme is set to commence within the quarter. The reforms are widely seen as a step toward creating a more stable, transparent, and sustainable electricity market that benefits both consumers and investors.