Tinubu Approves N3.3trn Settlement for Power Sector Legacy Debt

Nigeria's President Bola Ahmed Tinubu

Special Report: Tinubu Approves ₦3.3 Trillion Settlement for Power Sector Legacy Debt

President Bola Tinubu has taken a decisive step toward stabilizing Nigeria’s electricity sector by approving a ₦3.3 trillion settlement plan to clear long-standing debts under the Presidential Power Sector Financial Reforms Programme.

This landmark decision, announced on April 5, 2026, addresses obligations that have accumulated between February 2015 and March 2025, marking the first comprehensive resolution of legacy debts that have hindered the sector for over a decade.

The settlement, described as a full and final payment after thorough verification, is designed to restore confidence across the power value chain. Already, 15 power plants have signed agreements worth ₦2.3 trillion, while the Federal Government has raised ₦501 billion to fund the initial phase, with ₦223 billion disbursed so far.

This infusion of funds is expected to stabilize electricity generation, ensure gas suppliers are paid, and improve reliability for consumers nationwide.

According to Olu Arowolo-Verheijen, Special Adviser on Energy to the President, the initiative is not just about clearing debts but about laying the foundation for broader reforms.

These include improved metering systems, service-based tariffs that align payments with electricity quality, and prioritization of supply to businesses and industries. The government’s vision is to create a more reliable system that supports job creation, economic growth, and better livelihoods.

President Tinubu commended stakeholders for their role in resolving these legacy issues and confirmed that the next phase of the programme, known as Series II, will commence within the current quarter.

The settlement is expected to unlock new investments, generate employment opportunities, and enhance service delivery, ultimately positioning Nigeria’s power sector as a more dependable engine for economic transformation.

This move represents one of the most significant interventions in Nigeria’s energy landscape in recent years, signaling a renewed commitment to tackling structural challenges and delivering reliable electricity to homes and businesses across the country.