Manny Ita –
President Bola Tinubu has approved a ₦3.3 trillion settlement plan aimed at clearing accumulated debts in Nigeria’s power sector under the Presidential Power Sector Financial Reforms Programme. The decision follows a comprehensive review of legacy liabilities that have built up over a decade and have significantly affected the operations of key players within the electricity value chain.
According to government sources, the debts—incurred between February 2015 and March 2025—were verified before arriving at the final settlement figure. The implementation of the payment plan has already begun, with disbursements reaching some stakeholders across the power sector, including generation companies and gas suppliers.
The Federal Government explained that the initiative is designed not only to address outstanding obligations but also to restore stability and confidence within the industry. Authorities say the flow of payments into the sector will help improve liquidity, enable power plants to operate more efficiently, and reduce disruptions linked to unpaid obligations.
Officials noted that several power generation companies have already entered into settlement agreements, with commitments reportedly covering a significant portion of the total amount. The government has also mobilised funding to support the programme, with a portion already raised and partially disbursed to affected parties.
The Special Adviser to the President on Energy emphasized that the intervention is part of broader structural reforms in the electricity sector. These reforms include efforts to improve metering, align electricity tariffs with service delivery, and ensure that payments across the value chain are more sustainable. The overarching goal, according to the presidency, is to create a more reliable and efficient power supply system that supports households, businesses, and industrial growth.
Nigeria’s power sector has faced persistent challenges over the years, largely driven by liquidity constraints and mounting debts owed to generation companies and gas suppliers. These financial pressures have contributed to reduced power generation capacity and periodic operational disruptions among providers.
The new settlement plan is expected to ease some of these constraints by injecting funds into the sector and addressing long-standing arrears. However, stakeholders continue to monitor the implementation process, with attention on transparency, sustainability, and the long-term impact of the reforms on electricity supply across the country.
