The Federal Government has sanctioned a phased refinancing programme to address ₦4 trillion ($2.61 billion) in legacy electricity sector debt, a move aimed at restoring investor confidence, boosting liquidity, and improving power supply across the country. The liabilities, owed to 27 power generation companies for invoices accrued between 2015 and 2023, have long hindered investment flows and worsened Nigeria’s persistent electricity shortages. President Bola Tinubu approved the plan following a comprehensive verification of claims, reaffirming his administration’s commitment to tackling structural bottlenecks in the power sector.
According to Finance Minister Olawale Edun, the refinancing will be implemented within three to four weeks under the Debt Management Office’s supervision. The structure is expected to feature bond issuances and other long-term instruments to spread repayment obligations over time, easing fiscal pressure while ensuring creditors are settled. The plan is integrated into the government’s wider electricity reform package, which includes a 35% reduction in power subsidies and tariff adjustments for urban consumers — measures projected to save ₦1.1 trillion ($718.58 million) annually.
The debt resolution is anticipated to unlock fresh investment into the electricity value chain, enhance generation capacity, and improve supply reliability. By clearing long-standing arrears, generation companies will have greater working capital to maintain and expand operations, while the government’s subsidy reforms are expected to strengthen sector finances. The initiative also signals to investors that Nigeria is serious about fiscal discipline and structural reform, potentially accelerating private-sector participation in future power projects.
