Implementation begins as 15 power plants sign N2.3tr agreements
President Bola Tinubu has approved a N3.3 trillion payment plan to settle outstanding debts in the electricity sector, a move aimed at stabilising power generation and improving electricity supply nationwide.

According to a statement signed by Special Adviser to the President on Information and Strategy, Bayo Onanuga, implementation of the plan has already commenced, with 15 power plants signing settlement agreements totalling N2.3 trillion.

He added that the Federal Government had raised N501 billion to fund the disbursements, of which N223 billion had already been released, with further payments ongoing.

The settlement plan covers legacy debts accumulated between February 2015 and March 2025, following a final review under the Presidential Power Sector Financial Reforms Programme. After verification, N3.3 trillion was agreed as a full and final settlement.

The power industry has been beset by financial stress for years as chronic under‑payment of invoices by Distribution Companies (DisCos) and persistently low tariff remittances deepened liquidity shortages for Generation Companies (GenCos), forcing the central trading entity, Nigerian Bulk Electricity Trading Plc (NBET), to rely on expensive commercial credit to make partial settlements.

Compounding this, ongoing government subsidy obligations eclipsed payments in 2025, with only an estimated 39 per cent of GenCos’ invoices settled and unfunded subsidies ballooning to about N1.85 trillion.

Earlier disputes between the Federal Government and GenCos over the true size of outstanding liabilities, ranging in public reports from N2.8 trillion to N4 trillion, highlighted the complex nature of reconciling historical claims under different reporting frameworks.

However, it was noted that the release of funds would strengthen the entire electricity value chain, allowing power plants to operate more reliably, ensuring gas suppliers are paid, and improving electricity supply to homes, businesses, and industries.

The Special Adviser on Energy to President Tinubu, Olu Arowolo‑Verheijen, explained that the programme was part of a broader set of reforms already underway, including better metering and service-based tariffs that link what is paid to the quality of electricity received.

President Tinubu commended all stakeholders who contributed to resolving the legacy issues in the power sector and confirmed that the next phase of the programme, Series II, would begin this quarter.