President Bola Tinubu has approved a ₦3.3 trillion payment arrangement designed to clear longstanding obligations within Nigeria’s power sector, a step expected to strengthen electricity supply and rebuild investor confidence.
The disclosure was contained in a statement released on Sunday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga.
According to the statement, the approval came after a final assessment of legacy liabilities accrued under the Presidential Power Sector Financial Reforms Programme over a decade, covering February 2015 to March 2025.
“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement partly read.
The government explained that execution of the repayment framework has already begun, with 15 power generation companies signing settlement agreements worth ₦2.3 trillion.
It further noted that the Federal Government has so far mobilised ₦501 billion to finance the programme, from which ₦223 billion has already been released, while additional payments remain in progress.
Clarifying the importance of the initiative, the Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the intervention extends beyond simply resolving debts.
“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.
She explained that the initiative is part of broader sector reforms, including expanded metering and the implementation of service-based tariffs.
“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.
“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.
“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” she added.
The presidency said settling the outstanding obligations would improve liquidity throughout the power value chain, resulting in steadier electricity generation and better service delivery.
President Tinubu also praised stakeholders for their contributions toward resolving the lingering challenges and confirmed that the next stage of the programme, known as Series II, will begin within the current quarter.
Nigeria’s fragile electricity supply has long been characterised by repeated grid collapses, limited generation capacity, and persistent outages affecting households and businesses.
A 2024 report by Africa Trade Barometer revealed that Nigeria loses an estimated $26 billion annually due to power failures.
It noted that businesses spend roughly $22 billion every year on off-grid fuel to cushion the effects of electricity shortages. This further increases operating expenses.
“Economic losses arising from Nigeria’s electricity shortages are estimated to be USD 26 billion annually, without accounting for spending on fuel for off-grid generators, which is estimated to be a further USD 22 billion,” the report by Standard Bank said.
“In Nigeria, surveyed businesses must contend with a national grid that frequently collapses as it fails to meet a daily peak demand which is nearly four times its generation capacity,” it added.
