April 05, (THEWILL) — President Bola Tinubu has approved a landmark ₦3.3 trillion payment plan to resolve long-standing financial obligations in Nigeria’s power sector, in a decisive move expected to restore stability, improve electricity supply, and stimulate economic growth across the country.
The approval, announced in a State House press release issued on Sunday by the presidential spokesman, Bayo Onanuga, marks a major milestone under the Presidential Power Sector Financial Reforms Programme. The initiative seeks to finally clear legacy debts that have plagued the sector for over a decade, undermining efficiency and investor confidence.
According to the statement, the debts accumulated between February 2015 and March 2025 were subjected to a comprehensive verification process, culminating in an agreed ₦3.3 trillion as a full and final settlement. The development is widely regarded as a transparent and equitable resolution designed to reset the financial health of Nigeria’s electricity value chain.
Implementation of the repayment plan is already underway, with tangible progress recorded. Fifteen power generation companies have signed settlement agreements amounting to ₦2.3 trillion, reflecting strong stakeholder buy-in and renewed confidence in the reform process. The Federal Government has so far mobilised ₦501 billion to kick-start the payments, with ₦223 billion already disbursed and additional releases ongoing.
Energy experts say the injection of funds into the sector will have immediate and long-term benefits. By settling outstanding obligations to power generation companies and gas suppliers, the government is removing critical bottlenecks that have historically constrained electricity production and distribution.
Explaining the broader implications of the programme, the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, noted that the initiative goes beyond debt repayment to restoring operational efficiency and trust within the sector.
“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 stated.
Verheijen further emphasised that the reform forms part of a wider strategy to reposition the electricity industry, including the rollout of improved metering systems and the implementation of service-based tariffs that align consumer payments with the quality of power supply received.
Industry analysts believe that these complementary reforms will help address long-standing inefficiencies, reduce estimated billing disputes, and enhance accountability among distribution companies.
In addition, the Federal Government is placing strategic priority on ensuring a stable electricity supply to critical sectors of the economy, particularly industries, manufacturing hubs, and small and medium-scale enterprises. This targeted approach is expected to boost productivity, lower operating costs, and create new employment opportunities.
“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians”, Arowolo-Verheijen added, underscoring the administration’s commitment to delivering measurable improvements in electricity access and reliability.
President Tinubu commended all stakeholders—including power generation companies, financial institutions, and regulatory bodies—for their cooperation in resolving the legacy challenges. He also confirmed that the next phase of the programme, known as Series II, will commence within the current quarter, signalling continuity and sustained reform momentum.
The power sector reform initiative is being hailed as one of the most significant interventions in Nigeria’s energy landscape in recent years. With improved liquidity, enhanced investor confidence, and a clearer regulatory framework, stakeholders are optimistic that the country is on the path to achieving a more stable, efficient, and reliable electricity supply system.
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