President Bola Tinubu has approved a N3.3 trillion payment plan to address accumulated debts in Nigeria’s power sector, as part of efforts to stabilise electricity supply nationwide.

The development was disclosed in a statement by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, who said the initiative follows a comprehensive review of legacy debts spanning from February 2015 to March 2025.

According to the statement, the agreed sum represents a final settlement aimed at resolving long-standing financial obligations within the power value chain in a transparent manner.

Implementation of the plan is already underway, with about 15 power generation companies signing settlement agreements worth N2.3 trillion. The Federal Government has reportedly secured N501 billion to kick-start the payments, out of which N223 billion has been disbursed.

Officials say the intervention is expected to improve power generation and overall electricity reliability, as it will enable gas suppliers and power plants to resume optimal operations.

Also speaking on the initiative, the Special Adviser on Energy, Olu Arowolo-Verheijen, said the programme is designed not only to clear debts but also to restore confidence in the sector.

She explained that the reforms would ensure that suppliers are paid, generation companies remain operational, and the system functions more efficiently. She added that the government is also advancing measures such as improved metering and service-based tariffs to align payments with the quality of electricity supplied.

The President further indicated that the next phase of the programme will commence later this quarter, while commending stakeholders for their role in addressing the sector’s long-standing challenges.

The move comes amid concerns raised by the Association of Power Generation Companies, whose Chief Executive Officer, Joy Ogaji, recently revealed that debts owed to generation companies have continued to rise, largely due to unpaid obligations from the Nigerian Bulk Electricity Trading Plc.

Ogaji noted that a significant portion of the debt is tied to gas suppliers, as thermal plants account for most of the electricity generated on the national grid.

Despite differing figures between industry operators and the government, the approved bailout is seen as a major step toward resolving liquidity challenges and repositioning the power sector for improved performance.