In a decisive move to end a decade of financial instability in Nigeria’s energy sector, President Bola Tinubu has approved a comprehensive ₦3.3 trillion payment plan. The initiative, part of the Presidential Power Sector Financial Reforms Programme, aims to settle “legacy debts” that have long crippled the country’s electricity supply.
The debts, which accumulated between February 2015 and March 2025, had become a significant barrier to reliable power. Following a transparent verification process, the ₦3.3 trillion figure was agreed upon as a full and final settlement to restore liquidity to the value chain.
Implementation and Payouts Begin
The Federal Government has already moved beyond the planning stage, with high-level financial commitments currently in motion:
Agreements Signed: 15 major power plants have already entered into settlement agreements totaling ₦2.3 trillion.
Funding Raised: The government has successfully raised ₦501 billion to kickstart the first phase of payments.
Disbursements: ₦223 billion has already been paid out to stakeholders, with further disbursements scheduled for the coming weeks.
Restoring Market Confidence
According to Olu Arowolo-Verheijen, Special Adviser on Energy to the President, the reform is designed to create a “domino effect” of reliability throughout the system.
“This programme is not just about settling legacy debts; it is about restoring confidence,” Arowolo-Verheijen explained. “By ensuring gas suppliers are paid and power plants remain operational, we are creating a system that finally works for Nigerians.”
She further noted that this move aligns with broader reforms, including service-based tariffs and improved metering, ensuring that consumers only pay for the quality of electricity they actually receive.
Economic Impact: Priority for Businesses
A key pillar of this reform is the prioritization of power supply to small businesses and heavy industry. The administration views reliable electricity as the primary engine for job creation and economic growth.
What this means for the average Nigerian:
Stable Generation: Power plants will have the liquidity to maintain equipment and secure gas supply.
Grid Reliability: A reduction in frequency of system collapses and localized blackouts.
Investment Growth: A debt-free sector is expected to attract fresh domestic and foreign capital.
The Road Ahead
President Tinubu has expressed his appreciation to the stakeholders who facilitated the resolution of these long-standing issues. He also confirmed that the government is not stopping here: Series II of the payment and reform phase is scheduled to begin this quarter.
This landmark settlement signals a shift from “emergency fixes” to a sustainable, market-driven power sector intended to power Nigerian homes and industries into the next decade.
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