President Bola Tinubu has approved a ₦3.3 trillion plan to settle old debts in Nigeria’s power sector to make electricity more reliable and attract investors.

Presidential spokesperson Bayo Onanuga said that after reviewing debts from February 2015 to March 2025 under the Presidential Power Sector Financial Reforms Programme, ₦3.3 trillion was confirmed as a full and fair settlement.

The government said the plan is already in action, with fifteen power companies signing settlements worth ₦2.3 trillion, ₦501 billion raised so far, and ₦223 billion already paid out.

Special Adviser on Energy to the President, Olu Arowolo-Verheijen, said the initiative aims to stabilize the entire power chain, restore trust in the sector, ensure gas suppliers are paid, keep power plants running, and improve system reliability.

She added that the plan is part of broader reforms, including better metering systems and tariffs that match the quality of electricity supplied. The government emphasized that businesses and industries will be prioritized to support economic growth and job creation, aiming for more reliable power for homes, stronger support for companies, and a system that works better for all Nigerians.

Officials said clearing the debt backlog will improve liquidity in the sector, leading to steadier electricity generation and better service delivery, with the next phase, Series II, expected to begin this quarter.

Nigeria’s power sector has long struggled with low output, frequent grid failures, and widespread blackouts, and a 2024 Standard Bank report estimated the country loses around $26 billion yearly due to shortages while businesses spend an additional $22 billion on backup power like generators.