Tinubu approved a ₦3.3 trillion debt settlement plan to overhaul the power sector

President Bola Tinubu has given the green light to a ₦3.3 trillion repayment framework designed to pay off long-term liabilities in Nigeria’s power sector and improve electricity supply across the country.

The initiative targets the accumulation of old debt between February 2015 and March 2025 under the President’s Power Sector Financial Reform Program, with the government adopting a comprehensive resolution approach after conducting an extensive audit of outstanding obligations.

According to a statement issued on Sunday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, the implementation phase is already underway, and various stakeholders in the electricity value chain have started receiving payments.

The statement read, “President Bola Tinubu has approved a payment plan to finally pay off outstanding debts under the Presidential Power Sector Financial Reform Programme.

“This debt repayment plan is a follow-up to the final review of old debts that have burdened the electricity sector for more than a decade.

“The long-term debt was accumulated between February 2015 and March 2025. After verification, ₦3.3 trillion has been approved as full and final settlement, ensuring a fair and transparent settlement.

“Implementation has begun, with 15 power generators signing settlement agreements totaling ₦2.3 trillion. The Federal Government has raised ₦501 billion to fund these payments. Of this amount, N223 billion has been disbursed, and further payments are underway.

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“What this means for Nigerians: With payments spanning the electricity value chain, electricity generation will be more stable. With power generation support, electricity reliability will increase.”

Further insight into these reforms was provided by the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, who emphasized that these initiatives are more than just debt relief, but also restore confidence and function in the sector.

“This program is not just about paying off existing debt, but also restoring confidence in the electricity sector – ensuring that gas suppliers are paid, power plants can continue to operate, and the system starts to work more reliably,” he said.

He noted that these efforts are part of a broader reform agenda that includes improvements to the metering system and service-based tariffs that align consumer payments with the quality of electricity supply.

The government also plans to prioritize the distribution of electricity to important sectors such as business, industry and small businesses to stimulate economic growth and job creation.

“The goal is simple: more reliable electricity for homes, stronger support for businesses, and a better-functioning system for all Nigerians,” Arowolo-Verheijen said.

President Tinubu commended the stakeholders involved in resolving long-standing financial problems in the sector and confirmed that the next phase of reforms, known as Series II, is scheduled to begin this quarter.