President Bola Tinubu has approved a ₦3.3 trillion payment plan aimed at clearing a decade-long backlog of debts in Nigeria’s troubled power sector, a move the government says could mark a turning point in the country’s persistent electricity crisis.
As the next phase of the programme begins, many are watching closely – not for policy announcements, but for a simple outcome: steady power in their homes and businesses.
A Familiar Promise in a Troubled Sector
For decades, Nigeria’s power sector has been synonymous with erratic supply, despite repeated reform efforts. Since the 2013 privatization of generation and distribution companies, successive governments have pledged improvements, yet millions of Nigerians still rely on generators to fill daily supply gaps.
At the heart of the problem has been a cycle of debt and inefficiency: distribution companies struggle with revenue collection, generation companies remain underpaid, and gas suppliers often go unpaid — leading to reduced output and frequent grid instability.
Energy experts say the newly approved payout directly targets this cycle, potentially unlocking generation capacity that has been constrained by liquidity shortages.
“This is one of the most ambitious attempts to clean up the sector’s balance sheet,” said a Lagos-based power analyst. “If implemented transparently, it could improve generation in the short term. But Nigeria has seen large interventions before.”
Implications: Stability vs Structural Weakness
The government insists the intervention will translate into more reliable electricity for households and businesses. Olu Arowolo-Verheijen, Special Adviser on Energy to the President, said the programme is about “restoring confidence” across the sector and enabling a more functional electricity market.
However, analysts caution that debt repayment alone may not resolve deeper structural issues, including:
-
▪︎ Weak transmission infrastructure that limits how much power can be delivered nationwide
-
▪︎ Chronic metering gaps that undermine revenue collection
-
▪︎ Tariff shortfalls and political resistance to cost-reflective pricing
-
▪︎ Persistent grid collapses that highlight system fragility
Historically, similar financial interventions – including bailout funds and payment assurances – have provided temporary relief but failed to produce sustained improvements in supply.
Businesses Watch Closely
For Nigeria’s private sector, the stakes are high. Unreliable electricity has long increased operating costs, forcing companies to spend heavily on diesel and petrol generators.
The government says it is prioritizing electricity supply to industries and small businesses as part of broader reforms, including service-based tariffs and improved metering.
If successful, economists say the plan could reduce production costs, boost job creation, and improve competitiveness. But if it falters, it risks reinforcing public skepticism about government-led power reforms.
Public Trust on the Line
Beyond the technical and financial implications, the initiative represents a test of public confidence. Nigerians have heard repeated assurances of improved electricity over the years, often with limited results.
The Tinubu administration’s decision to move forward with a “full and final settlement” of sector debts signals a recognition that liquidity – long identified as a core constraint – must be addressed decisively.
Yet the ultimate measure of success will not be in trillions disbursed, but in hours of electricity delivered.
Below is the Presidency’s full statement:
STATEHOUSE PRESS RELEASE
PRESIDENT TINUBU APPROVES N3.3 TRILLION PAYMENT PLAN TO RESTORE RELIABLE ELECTRICITY
President Bola Tinubu has approved the payment plan to finally settle the outstanding debts under the Presidential Power Sector Financial Reforms Programme.
The debt repayment plan followed the final review of the legacy debts that have beset 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.
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, N223 billion has been disbursed, with further payments underway.
What this means for Nigerians: With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve.
And as the sector stabilises, more investment, more jobs, and better service will follow.
“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,” explained Olu Arowolo-Verheijen, Special Adviser on Energy to President Tinubu.
“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.
President Tinubu has commended all stakeholders who supported efforts to resolve the legacy issues in the power sector. He has also confirmed that the next phase (Series II) will begin this quarter.
Bayo Onanuga
Special Adviser to the President
(Information and Strategy)
April 5, 2026
