President Bola Tinubu has approved a payment plan to settle the ₦3.3 trillion outstanding debt in the power sector under the Presidential Power Sector Financial Reforms Programme.
Bayo Onanuga, Special Adviser to the President on Information and Strategy, announced the approval in a statement on Sunday.
The approval comes almost four weeks after the Association of Power Generation Companies (APGC) said gas firms were planning to stop supply to thermal power plants over an estimated ₦3.3 trillion debt owed by generation companies (GenCos).
On February 19, APGC said the federal government owes GenCos about ₦6.5 trillion.
According to Onanuga, the repayment plan followed the final review of 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, ₦223 billion has been disbursed, with further payments underway.”
The spokesperson said power generation will become more stable as payments reach the power value chain, adding that electricity reliability will improve as power plants receive support.
Onanuga said that as the power sector stabilises, more investment, more jobs, and better services will follow.
Also, Tinubu commended all stakeholders who supported efforts to resolve the legacy issues in the power sector.
The president said the next phase (Series II) will begin this quarter.
Speaking on the approval, Olu Arowolo-Verheijen, Special Adviser on Energy to the President, said the programme is not just about settling legacy debts but also about restoring confidence across the power sector and ensuring gas suppliers are paid.
Arowolo-Verheijen said the plan will ensure gas suppliers are paid, power plants keep running, and the system operates more reliably.
“It is part of a broader set of reforms already underway — including improved metering and service-based tariffs that link what you pay to the quality of electricity you receive,” she 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.”
Arowolo-Verheijen said the goal of the programme is to deliver “more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians.”
