President Bola Tinubu has unveiled a ₦3.3 trillion plan to settle longstanding debts in Nigeria’s power sector, in a move aimed at stabilising electricity supply and restoring investor confidence.

The initiative, described as a legacy debt settlement plan, targets a backlog of unpaid obligations accumulated over roughly a decade, including subsidies, capacity charges and debts owed to gas suppliers.

According to details of the plan, the verified debt stands at ₦3.3 trillion, with about ₦2.3 trillion already acknowledged by generation companies. So far, ₦501 billion has been raised, out of which ₦223 billion has been disbursed.

The Federal Government said clearing the liabilities would enable gas suppliers to receive payments, allowing power plants to operate more consistently and improve electricity generation across the country.

Officials noted that the intervention is also expected to attract private investment into the sector, reduce dependence on diesel and petrol generators, and support job creation.

However, the reforms may lead to adjustments in electricity tariffs, as authorities move towards a service-based pricing model that reflects actual power supply.

The government maintains that resolving the debt overhang is critical to breaking the cycle of financial instability in the power sector and setting the stage for long-term improvements in electricity delivery.