The Presidency says legacy electricity debts have now been verified, negotiated down and packaged for payment, but Nigeria’s power crisis will not vanish unless gas, grids, metering and tariff discipline finally begin to work together.
ABUJA, Nigeria — President Bola Tinubu has approved a fresh payment plan to settle Nigeria’s long-running electricity debts, with the State House saying the liabilities accumulated between February 2015 and March 2025 have now been fixed at ₦3.3 trillion as a “full and final settlement” after verification.
The Presidency says implementation has already started, with 15 power plants signing settlement agreements worth ₦2.3 trillion, while ₦501 billion has been raised and ₦223 billion already disbursed.
This is not happening in a vacuum. In August 2025, the Tinubu administration had already approved a broader ₦4 trillion government-backed bond framework to clear verified arrears owed to generation companies and gas suppliers, after describing the debt pile as a decade-long drag on investment and utility balance sheets.
The new ₦3.3 trillion figure therefore suggests, by inference, that months of verification and negotiation have trimmed the headline liability from the earlier ceiling, rather than simply expanding state spending without scrutiny.
That matters because Nigeria’s power sector has spent years in a financial spiral.
The World Bank has warned that 85 million Nigerians still lack access to electricity, that unreliable power costs the economy an estimated 5 to 7 per cent of GDP, and that distribution companies are still operating with technical, commercial and collection losses of about 50 per cent, far above international good practice.
It also says tariff shortfalls helped break the payment chain long before this latest rescue plan was announced.
The political problem is that Nigeria has repeatedly tried to buy stability without fixing the machinery that creates the crisis.
NERC’s third-quarter 2025 report said the federal subsidy policy froze end-user tariffs in August 2025 at July 2024 levels, even as the regulator kept pushing cost-reflective pricing and other market adjustments.
In plain terms, the system is still trying to balance affordability for consumers with the hard reality that someone must pay for the electricity actually produced.
The first real test of credibility came in January 2026, when the government said its inaugural ₦501 billion bond under the Presidential Power Sector Debt Reduction Programme was 100 per cent subscribed.
That tranche covered five generation companies representing 14 power plants, with a negotiated settlement of ₦827.16 billion payable in four instalments, and about ₦421.42 billion earmarked for the first and second instalments.
The lesson was clear: the market will still fund Nigerian power, but only where the rules are visible and the payment path looks believable.
Even so, the government’s own people have admitted that cash alone is not the cure.
In March 2026, NERC said the Minister of Power had pointed to the highest electricity generation level recorded to date, while also saying repaired gas pipelines and increased gas supply could improve thermal generation in the near term.
That is a useful sign, but it is also a reminder that the biggest bottleneck is not just debt. It is fuel supply, grid fragility and the stubborn failure to turn generation into dependable household power.
Nigeria has seen flashes of progress before. Reuters reported in March 2025 that power generation peaked at a record 5,801.84MW and that the government was then hoping to push beyond 10,000MW by the end of 2026.
Yet the sector has a habit of moving forward in headlines and backwards in reality, which is why every fresh settlement plan must be judged against actual megawatts delivered, not political language about reform momentum.
The larger reform story is that the Presidency is trying to stitch together debt clearance, tariff adjustment, metering, gas supply and private capital in one sweep.
The Office of the Special Adviser on Energy said in October 2025 that the plan is meant to close metering gaps, align tariffs with efficient costs, improve subsidy targeting and restore regulatory trust.
That is the right theory. The danger is that Nigeria has heard similar promises for years while businesses kept buying diesel, households kept living with darkness and the grid kept wobbling under the weight of old failures.
So the hard truth is this. The ₦3.3 trillion plan may well be the most serious liquidity reset the power market has seen in a decade, and it could help gas suppliers, generation companies and lenders breathe again.
But unless the money reaches the right hands on time, unless transmission improves, and unless service quality starts to track what Nigerians pay, this will become just another expensive intervention in a sector that has swallowed many of them already.
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