In a bold attempt to fix Nigeria’s struggling electricity industry, Bola Ahmed Tinubu has approved a massive ₦3.3 trillion plan aimed at clearing long-standing debts in the country’s power sector.
The initiative, described by the presidency as one of the most significant interventions in years, is designed to tackle over a decade of unpaid obligations that have crippled electricity generation and slowed economic growth.
According to a statement from Presidential Adviser, Bayo Onanuga, the settlement covers legacy debts accumulated between February 2015 and March 2025. During that period, Nigeria’s electricity industry battled chronic underinvestment, unresolved tariff disputes, and mounting debts owed to power generation companies and gas suppliers.
So far, 15 power plants have signed settlement agreements worth about ₦2.3 trillion. The Federal Government has already raised ₦501 billion to fund the payments, with ₦223 billion reportedly released and additional disbursements expected.
Despite being Africa’s most populous country, Nigeria continues to struggle with electricity supply. The nation often generates less than 4,500 megawatts of power for a population of over 220 million people, forcing businesses and households to rely heavily on expensive diesel generators.
Unpaid debts across the electricity value chain – from distribution companies to power generators and gas suppliers – have long discouraged investment and left many power plants operating far below their capacity.
The government believes clearing these legacy debts will restore financial stability in the sector, enabling power plants to secure gas supplies, increase generation, and eventually attract new private investment.
Energy adviser, Olu Arowolo-Verheijen, said the programme is part of a broader effort to rebuild confidence in Nigeria’s electricity market.
She explained that the reforms go beyond settling old debts and include measures such as expanding electricity metering and introducing tariffs that better reflect the quality of power supply – changes that investors have long demanded.
The administration also plans to prioritise electricity supply for industrial and commercial users, arguing that reliable power for businesses could drive job creation and accelerate economic growth.
Officials say the next phase of the Presidential Power Sector Financial Reforms Programme will launch later this quarter, with plans to extend the settlement framework to other outstanding claims within the verified ₦3.3 trillion debt.
While the government describes the package as a “full and final settlement,” analysts say its success will depend largely on consistent funding and swift execution – especially in a challenging economic climate marked by subsidy reforms and currency pressures.
