President Bola Tinubu has approved a N3.3 trillion plan to settle long-standing debts owed to power generation companies, but the move has triggered resistance from GenCos.
In a statement issued by presidential spokesperson Bayo Onanuga, the Federal Government said the amount was agreed upon after verifying legacy debts that have accumulated for over a decade.
“Following verification, N3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution.
“Implementation has begun, with 15 power plants signing settlement agreements totalling N2.3 trillion. The Federal Government has already raised N501 billion to fund these payments. Out of the amount, N223 billion has been disbursed, with further payments underway.
“What this means for Nigerians: With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve.
“And as the sector stabilizes, more investment, more jobs, and better service will follow,” the statement said.
Reacting, Olu Arowolo-Verheijen described the initiative as a broader reform effort aimed at restoring confidence in the sector.
“This program is not just about settling legacy debts. It is about restoring confidence across the power sector—ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably.
“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive,” he said.
However, the Association of Power Generation Companies (APGC) rejected the plan, arguing that the government reduced the verified debt from about N6 trillion to N3.3 trillion.
The group’s Chief Executive Officer, Joy Ogaji, questioned the process, asking, “Is verification unilateral in a bilateral agreement?”
The development follows criticism from Peter Obi, who recently faulted the administration’s handling of the power sector, saying ongoing electricity challenges reflect unfulfilled promises.
Despite earlier assurances by Tinubu to improve power supply within four years, Nigerians continue to grapple with persistent outages across the country.