Tinubu Approves N3.3 Trillion Plan to Clear Power Sector Legacy Debt

President Bola Tinubu has approved a N3.3 trillion payment plan to clear legacy debts owed to Nigeria’s power generation companies, following a period of verification and negotiations. The plan, announced by presidential spokesperson Bayo Onanuga, aims to resolve a financial backlog that has persisted for over a decade and is expected to stabilize electricity supply across the country.

The Federal Government had previously raised N501 billion through a bond to address part of the debt, which power sector stakeholders say has ballooned to N6 trillion. With the new arrangement, 15 power plants have already signed settlement agreements totaling N2.3 trillion, and N223 billion has been disbursed so far. Officials say further payments are underway as part of efforts to restore confidence in the sector.

Special Adviser on Energy Olu Arowolo-Verheijen described the initiative as more than a debt settlement, calling it a step toward improving gas supply, plant operations, and overall system reliability. She also noted ongoing reforms such as enhanced metering and service-based tariffs, linking electricity costs to the quality of supply.

However, the Association of Power Generation Companies (APGC) has criticized the move, arguing that the Federal Government unilaterally reduced the debt from N6 trillion to N3.3 trillion without mutual agreement. APGC Chief Executive Dr. Joy Ogaji questioned the legitimacy of the verification process, highlighting tensions between the government and industry players.

The announcement comes amid mounting public frustration over persistent power outages. In a recent statement, former Labour Party presidential candidate Peter Obi accused President Tinubu of failing to deliver on campaign promises to resolve the electricity crisis within four years. Nigerians have endured months of unstable power supply, with no clear signs of improvement despite official assurances.

With the payment plan now in motion, authorities say the move could unlock greater investment, create jobs, and improve service delivery. Whether it will translate into tangible relief for households and businesses remains to be seen.