Tinubu Approves N3.3tn Power Sector Debt Repayment to Boost Electricity Supply
- The federal government has approved a N3.3 trillion settlement for power sector debts
- Industry stakeholders claim total debts may be higher than the approved figure
- The programme is part of broader reforms to strengthen Nigeria’s power sector
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
President Bola Tinubu has approved a repayment plan to settle long-standing debts in Nigeria’s power sector, as part of efforts to address liquidity challenges affecting electricity supply, PUNCH reported.
The development was disclosed in a statement on Sunday by Bayo Onanuga, Special Adviser to the President on Information and Strategy.
Source: UGC
Government moves to clear decade-long debts
According to the statement, the repayment plan followed a final review of legacy debts accumulated between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme.
The government said N3.3 trillion has been agreed as a full and final settlement after verification, aimed at ensuring transparency and fairness in resolving the obligations.
Implementation begins with partial disbursements
Onanuga disclosed that implementation has already commenced, with 15 power generation companies signing settlement agreements worth N2.3 trillion.
He added that the Federal Government has raised N501 billion to fund the repayments, out of which N223 billion has already been disbursed, with further payments ongoing.
Expected impact on electricity supply
The presidency said the repayment is expected to improve stability across the power value chain, particularly in electricity generation.
According to the statement, supporting power plants financially will enhance electricity reliability, attract investment, and create jobs as the sector stabilises.
Energy adviser highlights broader reforms
The Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the programme goes beyond debt settlement.
She noted that it is aimed at restoring confidence in the sector, ensuring gas suppliers are paid, and enabling power plants to operate more reliably.
Arowolo-Verheijen added that the reforms include improved metering and service-based tariffs that align electricity costs with service quality, as well asf efforts to prioritise power supply to businesses and industries.
President Tinubu also commended stakeholders involved in resolving the sector’s challenges and confirmed that the next phase of the programme will commence within the current quarter.
GenCos cite higher outstanding debt
However, the Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, recently stated that the sector’s total debt burden is significantly higher.
She explained that gas suppliers had halted supply to thermal plants due to unpaid obligations estimated at about N3.3 trillion, worsening electricity shortages nationwide.
Ogaji attributed the crisis to payment shortfalls by the Nigerian Bulk Electricity Trading Plc, which she said has not fully settled invoices for electricity generated since the sector’s privatisation.
Source: UGC
Discrepancy in debt figures raises concerns
According to Ogaji, total debt owed to power generation companies has risen to about N6.8 trillion, with a large portion linked to thermal plants that rely on gas supply.
She noted that monthly shortfalls have continued to increase the debt profile, highlighting a gap between the government’s approved settlement figure and industry estimates.
GenCos deny receiving funds despite FG bond
Legit.ng earlier reported that power generation companies have not received any payments from the federal government.
This is despite the N501bn bond issued by the government to clear about N4tn owed to GenCos.
Industry stakeholders warn that the delay could worsen financial pressure on power operators.
Source: Legit.ng
