President Tinubu Approves $2 Billion Power Debt Settlement to Enhance Electricity Supply
President Bola Tinubu has given his approval for a comprehensive 3.3 trillion naira ($2 billion) payment plan designed to settle long-standing debts within Nigeria's power sector. This strategic move is aimed at boosting electricity supply across the country, addressing persistent issues that have hindered reliable power delivery for years.
Details of the Debt Settlement Plan
The presidency announced that this settlement covers legacy debts accumulated between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme. Following a thorough verification process, the total obligation was established at 3.3 trillion naira, which represents a full and final settlement intended to restore financial stability within the sector.
According to a statement issued by presidential spokesman Bayo Onanuga, implementation of the plan has already commenced. To date, 15 power generation companies have signed agreements worth 2.3 trillion naira as part of this initiative.
Funding and Implementation Progress
The federal government has successfully raised 501 billion naira to fund the debt settlement process. Of this amount, 223 billion naira has already been disbursed, with further payments ongoing to ensure timely resolution of outstanding obligations.
Officials emphasized that clearing these debts will significantly improve liquidity across the entire electricity value chain. This improvement is expected to ensure that gas suppliers receive timely payments and power plants can sustain their operations—both critical factors that should translate into increased and more reliable electricity supply for Nigerian consumers.
Broader Impact on Power Sector Stability
Olu Arowolo-Verheijen, special adviser to the president on energy, highlighted the broader significance of this initiative: "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."
The government has stated that improved funding for generation companies will help stabilize power output, addressing one of the longstanding constraints behind Nigeria's inconsistent electricity supply. This intervention forms part of wider reforms in the sector, including ongoing efforts to expand metering infrastructure and implement service-based tariffs linked to the quality of electricity delivered to consumers.
Context and Future Plans
Nigeria has struggled for years with inadequate electricity supply due to multiple challenges including funding shortfalls, infrastructure deficiencies, and liquidity issues within the power market. Authorities have indicated that a second phase of the programme is expected to begin later this quarter, as the government continues its efforts to strengthen the sector and deliver more reliable electricity to homes and businesses throughout the country.
