Tinubu Approves ₦3.3trn Debt Clearance to Strengthen Power Supply in Nigeria

President Bola Tinubu has given the green light to an all-encompassing repayment framework designed to clear accumulated debts within Nigeria’s power sector, as part of the Presidential Power Sector Financial Reforms Programme.

The decision follows a final review of legacy liabilities that have weighed down the sector for over a decade.

The debts, accumulated between February 2015 and March 2025, have now been verified, with ₦3.3 trillion agreed upon as a full and final settlement.

According to a statement made available to newsmen on Sunday by presidential spokesperson, Bayo Onanuga, implementation of the repayment plan is already underway.

So far, 15 power generation companies have signed settlement agreements valued at ₦2.3 trillion. The Federal Government has raised ₦501 billion to kick-start the process, out of which ₦223 billion has already been disbursed, with additional payments in progress.

The move is expected to have a direct impact on electricity supply across the country. By clearing debts owed across the power value chain, the government says generation capacity will stabilise, leading to improved reliability of electricity for homes and businesses.

The development is also projected to resolve the financial bottlenecks in the sector, attract fresh investments, create jobs, and enhance service delivery over time.

Speaking on the development, the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, said the initiative goes beyond debt repayment.

“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.

Arowolo-Verheijen added that the initiative forms part of broader reforms, including improved metering and the implementation of service-based tariffs that align electricity costs with the quality of supply.

She noted that the government is also prioritising electricity supply to businesses, industries, and small enterprises to support economic growth and job creation.

“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” she added.

President Tinubu commended stakeholders who contributed to resolving the sector’s legacy issues and confirmed that the next phase of the programme, known as Series II, will commence later this quarter.