Following criticism from former Labour Party presidential candidate Peter Obi, President Bola Ahmed Tinubu has approved a N3.3 trillion payment plan to clear longstanding debts owed to electricity generation companies (GenCos).
The development was disclosed in a statement issued on Sunday by presidential spokesperson Bayo Onanuga, who said the figure was arrived at after a comprehensive verification of legacy debts in Nigeria’s power sector, accumulated over more than a decade.
According to the statement, the N3.3 trillion settlement is separate from the previously introduced N501 billion bond meant to offset part of the liabilities. GenCos, however, have put the total outstanding debt at about N6 trillion.
“Following verification, N3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement said.
Implementation of the payment plan has already commenced, with 15 power plants signing settlement agreements worth N2.3 trillion. The government has reportedly raised N501 billion so far, with N223 billion already disbursed and additional payments ongoing.
The presidency noted that the intervention is expected to improve electricity generation and overall supply. “With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve,” the statement added, highlighting prospects for increased investment, job creation, and better service delivery.
Also commenting, the president’s special adviser on energy, Olu Arowolo-Verheijen, said the initiative goes beyond debt clearance.
“This program 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 move complements ongoing reforms such as improved metering and service-based tariffs.
However, the Association of Power Generation Companies (APGC) has criticized the government’s decision to reduce the recognized debt from N6 trillion to N3.3 trillion.
Reacting, the association’s chief executive officer, Joy Ogaji, questioned the process, asking, “Is verification unilateral in a bilateral agreement?”
The development comes days after Obi criticized the Tinubu administration’s handling of the power sector, arguing that persistent electricity challenges reflect unfulfilled campaign promises.
Despite government assurances, many Nigerians continue to grapple with erratic power supply, with no significant improvement recorded in recent months.
