Power sector debt: Tinubu approves N3.3 trillion settlement plan

President Bola Tinubu has approved a N3.3 trillion payment plan under the Presidential Power Sector Financial Reforms Programme to resolve legacy debts in Nigeria’s power sector, accumulated between February 2015 and March 2025. The initiative aims to restore confidence in the sector and improve electricity supply for Nigerians by ensuring payments to gas suppliers and power plants. According to Olu Arowolo-Verheijen, Special Adviser on Energy to President Tinubu, the program is part of broader reforms including better metering and service-based tariffs.

The settlement covers debts accumulated over a 10-year period, with approximately N2.3 trillion in agreements signed with 15 power plants. The government has raised N501 billion, of which N223 billion has already been disbursed. Authorities anticipate that this influx of funds will improve generation capacity and electricity reliability nationwide.

The debt crisis has significantly impacted power generation companies, leading to shutdowns and reduced output; Nigeria’s GenCos currently face a N6.8 trillion debt burden. This settlement plan follows previous frameworks for a N4 trillion government-backed bond to address arrears owed to GenCos and gas suppliers, though concerns were raised regarding a debt-for-debt strategy.

(Source：Nairametrics)