President Bola Tinubu has approved a payment plan to repay the power industry’s N3.3 trillion outstanding debt as part of the presidential power sector financial reforms initiative.
Bayo Onanuga, the president’s special assistant for information and strategy, confirmed the approval in a statement on Sunday.
The permission comes almost four weeks after the Association of Power Generation Companies (APGC) said that gas businesses want to suspend delivery to thermal power plants due to an estimated N3.3 trillion debt owing by generation companies (GenCos).
On February 19, APGC stated that the federal government owes GenCos around N6.5 trillion.
According to Onanuga, the repayment plan followed the final review of the legacy debts that have impacted the power sector for more than a decade.
“The long-standing debts accumulated between February 2015 and March 2025. Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” he said.
“Implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion. The Federal Government has already raised ₦501 billion to fund these payments. Out of the amount, N223 billion has been disbursed, with further payments underway.”
According to the spokesperson, payments reaching the power value chain would increase generating stability, while power plant support will improve electrical dependability.
Onanuga stated that when the electricity sector stabilises, more investment, employment, and improved service would follow.
Tinubu also praised all parties who helped to overcome the electricity sector’s legacy concerns.
The president also announced that the following phase (Series II) will commence this quarter.
Speaking on the clearance, Olu Arowolo-Verheijen, the president’s special adviser on energy, stated that the initiative is about more than simply clearing legacy debts; it is also about rebuilding trust in the electricity industry and ensuring that gas suppliers get paid.
Arowolo-Verheijen said it will ensure gas suppliers are paid, power plants 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 special adviser said.
“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.”
According to Arowolo-Verheijen, the program’s purpose is to deliver “more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians”.
What This Means: The move signals an effort by Bola Tinubu to prevent a potential collapse in power generation, as unpaid debts had pushed gas suppliers to the brink of cutting supply. Clearing part of the backlog could stabilise electricity in the short term, but it also highlights deep-rooted financial inefficiencies in Nigeria’s power sector. While the plan may restore investor confidence and improve supply, it could pave the way for higher tariffs and stricter payment systems, meaning consumers and businesses may ultimately bear part of the cost of fixing the system.
