As part of efforts to tackle persistent nationwide power outages, President Bola Ahmed Tinubu has approved N3.3 trillion to settle legacy debts incurred in the power sector over the past decade.
Of this sum, N550 billion has already been paid to gas suppliers and generation companies, with the government pledging to settle the remaining balance. The initiative aims to reverse chronic revenue shortfalls, restore gas supply, and enable improved maintenance of power plants — critical steps for boosting electricity generation across the country.
Chronic shortfalls had been largely driven by non-cost-reflective tariffs and underfunded subsidies, which left generation companies unable to meet obligations to gas suppliers and maintain critical infrastructure.
The Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Bolaji Tunji, explained that the government had earlier issued a N501 billion bond to restore confidence and unlock growth across the electricity value chain.
“This intervention is not just about settling debts; it is about resetting the foundation of the power sector. By restoring liquidity, enhancing bankability, and creating a more predictable investment climate, the government is laying the groundwork for sustainable growth and improved electricity supply,” Tunji said.
Industry stakeholders have welcomed the initiative, describing it as a “reset” of the electricity market, aimed at restoring trust and financial discipline while encouraging sustainable growth.
Early settlement agreements with generation companies, coupled with improvements in transmission capacity, reinforce the administration’s commitment to holistic sector reform.
Tunji noted that while challenges such as transmission constraints and revenue adequacy persist, the bond initiative represents a critical turning point. It signals a coordinated effort to move the sector away from systemic inefficiencies toward a more viable, investor-friendly model.
The N501 billion bond has been highlighted as a cornerstone achievement, addressing immediate financial pressures while advancing the minister’s reform-driven agenda. The program aims to position Nigeria’s power sector for long-term stability, improved service delivery, and the eventual realization of a reliable electricity supply for all citizens.
