Tinubu Approves N3.3 Trillion Plan to Clear Power Sector Debts, Boost Electricity Supply

President Bola Ahmed Tinubu has approved a N3.3 trillion financial settlement aimed at clearing longstanding debts in Nigeria’s electricity sector, in a move designed to stabilise power supply and rebuild investor confidence.

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

According to the statement, the approved amount represents a final settlement after a verification process, ensuring transparency and fairness in resolving obligations owed to stakeholders in the sector.

Implementation of the initiative is already in progress. So far, 15 power generation companies have signed agreements covering about N2.3 trillion of the total debt. Additionally, approximately N501 billion has been sourced to support the process, with N223 billion already disbursed.

Speaking on the reform, the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, noted that the plan is not only about settling debts but also about restoring functionality across the entire electricity value chain.

She explained that ensuring timely payments to gas suppliers and generation companies would help keep power plants operational and improve the reliability of electricity supply nationwide.

The reform effort is also tied to broader structural changes in the sector, including improved metering systems and the introduction of service-based tariffs. These measures aim to ensure that electricity consumers are billed in line with the quality of service they receive.

Government officials further emphasised that priority would be given to industries and businesses, recognising the critical role of stable electricity in driving economic growth, supporting productivity, and creating jobs.

Authorities believe that clearing the debt backlog will enhance liquidity within the sector, leading to improved generation capacity and better service delivery. The presidency also confirmed that the next phase of the reform programme, known as Series II, is expected to commence within the current quarter.

Nigeria’s power sector has long faced persistent challenges, including low generation output, recurring grid failures, and frequent outages. Analysts have previously estimated that inadequate electricity supply costs the country billions of dollars annually, while businesses continue to rely heavily on alternative energy sources such as generators.

The latest move is seen as a significant step toward addressing these challenges and building a more efficient and sustainable power system.