President Bola Ahmed Tinubu has approved a ₦3.3 trillion payment plan to clear longstanding debts in Nigeria’s power sector, in a major intervention aimed at restoring electricity reliability across the country.
The approval comes amid ongoing nationwide load shedding triggered by sharp declines in power generation, largely due to gas supply shortages that have constrained output from thermal plants.
According to a statement on Sunday issued by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the debt settlement falls under the Presidential Power Sector Financial Reforms Programme and follows a comprehensive review of legacy obligations accumulated between February 2015 and March 2025.
The government stated that the verified ₦3.3 trillion represents a full and final settlement designed to bring transparency and closure to financial liabilities that have plagued the sector for over a decade.
Implementation is already underway, with 15 power generation companies signing settlement agreements valued at ₦2.3 trillion.
The Federal Government has so far raised ₦501 billion to fund the programme, out of which ₦223 billion has been disbursed, while additional payments are in progress.
The intervention is expected to stabilise electricity generation by ensuring that power plants and gas suppliers receive payments owed, thereby enabling improved operational capacity across the value chain.
The move comes against the backdrop of a worsening power supply situation in recent weeks.
Industry data shows 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 has been largely attributed to inadequate gas supply to thermal plants, with deliveries falling to about 650–700 million standard cubic feet per day, less than half of the required volume, forcing several plants to shut down or operate below capacity.
This development compelled the Nigerian Independent System Operator (NISO) to enforce load shedding nationwide to prevent a total grid collapse.
Explaining the significance of the debt settlement, the President’s Special Adviser on Energy, Olu Arowolo-Verheijen, said the programme goes beyond financial reconciliation.
“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 initiative aligns with broader reforms, including improved metering and service-based tariffs that tie electricity payments to supply quality.
“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,” she noted.
President Tinubu commended stakeholders across the sector for their cooperation in resolving the long-standing issues and confirmed that the next phase of the programme, Series II, will commence within the current quarter.
