Tinubu okays N3.3tr power sector debt settlement plan
To guarantee a stable electricity supply, President Bola Ahmed Tinubu has approved a N3.3 trillion payment plan to settle debts in the power sector. The approval comes as electricity consumers
- ‘Final resolution of legacy issue to boost electricity supply’
- From Bolaji Ogundele, Abuja and Muyiwa Lucas
To guarantee a stable electricity supply, President Bola Ahmed Tinubu has approved a N3.3 trillion payment plan to settle debts in the power sector.
The approval comes as electricity consumers reel under outages arising from load shedding triggered by a sharp decline in power generation, largely due to gas supply shortages that have constrained output from thermal plants.
The debt repayment plan followed the final review of legacy debts that have bedevilled the power sector for more than a decade.
In a statement issued yesterday by the President’s Special Adviser on Information and Strategy, Mr Bayo Onanuga, the government said the N3.3 trillion resolution followed a comprehensive review of legacy obligations accumulated between February 2015 and March 2025.
It said the figure had been agreed upon as a full and final settlement, ensuring a fair and transparent resolution.
According to the government, implementation has begun, with 15 power plants signing settlement agreements totalling N2.3 trillion.
The Federal Government had earlier raised N501 billion to fund the payments.
Of this amount, N223 billion has been disbursed, with further payments underway.
Read Also: Bamidele defends 2026 Electoral Act, says it reflects stakeholders’ consensus
The debt settlement falls under the Presidential Power Sector Financial Reforms Programme.
Advertisement
300x250
President Tinubu commended all stakeholders who supported efforts to resolve the legacy issues in the power sector.
He assured that the next phase of payments, Series II, would commence this quarter.
Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the payment of legacy debts would have a profound impact on the entire power value chain, leading to more stable generation and a more reliable electricity supply.
She noted the economy-wide implications of the government’s move, with potential positive effects on investments, economic productivity and job creation.
Arowolo-Verheijen said: “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.
“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.
“The government is also prioritising power supply to businesses, industries and small enterprises, because reliable electricity is critical to creating jobs, supporting livelihoods and growing the economy.
“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians.”
Industry data showed yesterday that national generation dropped to an average of about 4,300 megawatts between February and March 2026, far below Nigeria’s installed capacity of over 13,000 megawatts and estimated demand exceeding 20,000 megawatts.
The shortfall was largely attributed to inadequate gas supply to thermal plants, with deliveries falling to about 650 to 700 million standard cubic feet per day, less than half of the required volume, forcing several plants to shut down or operate below capacity.
The development compelled the Nigerian Independent System Operator (NISO) to enforce load shedding nationwide to prevent a total grid collapse.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, described the debt payment resolution as a “bold step” that deserves commendation from all stakeholders.
He said: “I think we must commend the President for taking such a bold step, despite all the funding challenges the government is dealing with.
Advertisement
300x250
“For a government to give priority to this shows that the President and the government appreciate how critical the power sector challenge is.
“So, it is a very positive development, and it shows that the government is responsive to the concerns of citizens that the power sector must be fixed.”
According to him, clearing the legacy debts would improve electricity stability, as the debts contributed to the recent decline in supply because gas suppliers were not paid and, therefore, could not supply gas to generating companies.
He said: “Once liquidity improves, of course, we will have more power generated and transmitted.
“So, it is going to have a significant impact in terms of improvements in electricity supply.”
Yusuf added that the N3.3 trillion payment plan should not be undermined by disputes over the actual amount owed.
“Whether the amount is N6 trillion or N3 trillion, we all understand the complexities involved when it comes to managing subsidies, because this is, more or less, a subsidy that the government is providing to sustain electricity supply.
“Historically, when dealing with subsidy issues, there are always concerns about transparency and the accuracy of claims.
“But N3.3 trillion is a major step forward; it is not a small amount. Stakeholders in the sector should embrace this and work with the government to move the sector forward,” he said.
Advertisement
300x250
He, however, stressed the need for sustained reforms in the power sector.
Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, said the association was unclear about how the final figure of N3.3 trillion was determined.
She argued that as of March 2025, Generation Companies (GenCos), the Ministry of Finance, APGC, and the Nigerian Bulk Electricity Trading (NBET) Company jointly reconciled the debt and agreed on N4 trillion as the amount owed from 2015 to December 2024.
She said: “The N4 trillion was what was agreed as of March 2025. That was the last reconciliation. All parties signed off that the debt up to December 2024 was N4 trillion.
“It formed the basis of our meeting with the President in July at the State House, where he approved the N4 trillion in the form of cash and bonds and directed the Minister of Finance and the Debt Management Office (DMO) to work with GenCos to settle the legacy debt.
“So, it is not clear how the N3.3 trillion figure was arrived at.
“Also, the statement mentioned that about 15 generation companies have signed off.
“I can confirm that only five GenCos have signed off.
“I am aware of NDPHC, FIPL, Mabon and Geregu.
“There are only five GenCos that have signed.”
