Electricity: Tinubu approves ₦3.3trn payment plan

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

The announcement was made in a statement by presidential spokesperson Bayo Onanuga, who said the decision followed a review of legacy debts accumulated between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme. “Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement said.

According to the government, implementation is already underway. Fifteen power generation companies have signed settlement agreements worth ₦2.3 trillion, while ₦501 billion has been raised so far, with ₦223 billion already disbursed.

The Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the initiative is intended to stabilise the entire power value chain. “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 plan forms part of broader reforms, including improved metering systems and service-based tariffs. “It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive,” she said.

The government also stated that priority would be given to businesses and industries, emphasising the role of reliable electricity in economic growth and job creation. “The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” Arowolo-Verheijen added.

Officials say clearing the debt backlog will improve liquidity in the sector, leading to more stable electricity generation and better service delivery. The presidency confirmed that the next phase of the programme, known as Series II, is expected to begin within the current quarter.

Nigeria’s power sector has long struggled with low generation capacity, frequent grid collapses, and widespread outages. A 2024 report by Standard Bank estimated that the country loses around $26 billion annually due to electricity shortages, with businesses spending an additional $22 billion on alternative power sources such as generators.