Nigeria moves to restore investor confidence with sweeping settlement of legacy energy liabilities

Bola Tinubu has approved a ₦3.3tn payment plan to settle long-standing debts in Nigeria’s power sector, in a move the government says will stabilise electricity supply and rebuild investor confidence.

The decision, disclosed on Sunday in a statement by presidential spokesman Bayo Onanuga, follows a final review of liabilities accumulated under the Presidential Power Sector Financial Reforms Programme over a 10-year period from February 2015 to March 2025.

Officials said the verified sum represents a “full and final settlement”, aimed at resolving disputes that have weighed on the sector for years.

Implementation has already begun, with 15 generation companies signing agreements valued at ₦2.3tn. The Federal Government has so far raised ₦501bn to fund the initiative, disbursing ₦223bn, with further payments ongoing.

Presidential adviser on energy Olu Arowolo-Verheijen said the programme is designed not only to clear debts but to restore operational confidence across the electricity value chain.

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

She added that the plan forms part of broader reforms, including improved metering and the introduction of service-based tariffs linking payment to supply quality. The government is also prioritising electricity for businesses and industries in a bid to stimulate economic growth.

The presidency said the debt settlement is expected to improve liquidity in the sector, enabling more stable power generation and better service delivery. A second phase of the programme, known as Series II, is due to commence later this quarter.

Nigeria’s electricity sector has long struggled with low generation capacity, frequent grid collapses and widespread outages. According to a 2024 report by Standard Bank, the country loses an estimated $26bn annually due to power shortages, with businesses spending a further $22bn on alternative energy sources such as generators.

Analysts say the success of the repayment plan will depend on sustained reforms and improved governance in the sector, which remains critical to Nigeria’s economic ambitions.