President Bola Tinubu has approved a ₦3.3 trillion payment plan to settle long-standing debts in Nigeria’s power sector, a move expected to improve electricity supply and restore investor confidence.

The development was disclosed in a statement issued on Sunday by the Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga.

According to the statement, the approval followed a final review of legacy debts accumulated under the Presidential Power Sector Financial Reforms Programme over a 10-year period, spanning February 2015 to March 2025.

“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement read in part.

The government noted that implementation of the repayment plan has commenced, with 15 power generation companies signing settlement agreements valued at ₦2.3 trillion.

It added that the Federal Government has so far raised ₦501 billion to fund the initiative, of which ₦223 billion has already been disbursed, while further payments are ongoing.

Explaining the significance of the programme, the Special Adviser on Energy to the President, Ms. Olu Arowolo-Verheijen, said the initiative extends beyond debt clearance.

“This programme is not just about settling legacy debts. It is about restoring confidence across the power sector, ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably,” she said.

She added that the plan forms part of broader sector reforms, including improved metering and the introduction of service-based tariffs.

“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.

“The government is also prioritising power supply to businesses, industries, and small enterprises because reliable electricity is critical to creating jobs, supporting livelihoods, and growing the economy.

“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” she added.

The Presidency stated that settlement of the debts is expected to enhance liquidity across the power value chain, leading to more stable electricity generation and improved service delivery.

President Tinubu also commended stakeholders for their roles in resolving the long-standing issues and confirmed that the next phase of the programme, known as Series II, will commence within the current quarter.

Nigeria’s fragile power supply has long been marked by frequent grid collapses, low generation levels, and persistent outages affecting homes and businesses.