Tinubu Approves ₦3.3trn Pay-off to End Power Sector Debt Crisis

ABUJA – In a decisive move to end the liquidity crunch paralyzing Nigeria’s electricity supply, President Bola Tinubu has approved a ₦3.3 trillion payment plan to liquidate “legacy debts” that have hobbled the power sector for over a decade.

​The approval, announced on Sunday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, follows a comprehensive verification of arrears accumulated between February 2015 and March 2025. The ₦3.3 trillion figure has been agreed upon as a “full and final settlement” to clear the financial bottleneck between the government, generation companies (GenCos), and gas suppliers.

​For years, the Nigerian Electricity Supply Industry (NESI) has been trapped in a cycle of debt. Power plants often struggled to remain operational as unpaid invoices prevented them from maintaining equipment or paying for gas.

​Implementation of the new plan is already in motion:

1.15 Power Plants have signed formal settlement agreements totaling ₦2.3 trillion.

2.₦501 Billion has been raised by the Federal Government to kickstart the process.

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​3.₦223 Billion has already been disbursed to various stakeholders in the value chain.

​The funding for this intervention stems from the Presidential Power Sector Debt Reduction Programme (PPSDRP). Earlier this year, the government successfully issued a ₦501 billion inaugural bond, which saw 100% subscription from pension funds and asset managers—a sign of growing investor confidence in the administration’s energy reforms.

​Olu Arowolo-Verheijen, Special Adviser to the President on Energy, emphasized that the payout is a “reset button” for the entire market.

​”This programme is not just about settling legacy debts. It is about restoring confidence. We are ensuring gas suppliers are paid so that power plants can keep running,” she stated.

​She further noted that this financial cleanup is linked to a broader reform package, including Service-Based Tariffs and improved metering, designed to ensure that Nigerians only pay for the quality of electricity they actually receive.

​The Presidency confirmed that Series II of the payment plan is scheduled to commence this quarter. By resolving these historic liabilities, the government expects to unlock new private-sector investments and stabilize the national grid, which has suffered frequent collapses due to infrastructure neglect and lack of liquidity.

​For the average Nigerian, the government promises that these payments will translate into more stable generation and a prioritized supply for businesses and small enterprises to stimulate job creation.