The Federal Government of Nigeria is set to begin a phased repayment of ₦4 trillion ($2.61 billion) owed to electricity generation companies, a long-overdue move aimed at stabilising the country’s power sector and improving electricity supply nationwide.
Finance Minister, Olawale Edun, announced on Wednesday that President Bola Tinubu has approved the debt clearance plan, following a comprehensive audit of outstanding invoices, some dating back as far as 2015.
The bulk of the arrears are owed to 27 electricity generation firms, many of which have struggled to stay afloat due to years of unpaid invoices.
The lack of liquidity has severely hindered investment and contributed to persistent blackouts across the country.
The repayment, scheduled to begin within the next month, will be overseen by the Debt Management Office (DMO).
The government intends to use a mix of bond issuances and other structured financing options to avoid placing additional stress on its cash flow.
Officials say the plan is part of a broader reform agenda for the power sector that also includes gradual subsidy removal and tariff reviews.
These measures are expected to save the government approximately ₦1.1 trillion ($718 million) annually and create a more attractive environment for private investors.
“The goal is to build a sustainable, commercially viable power sector that can attract long-term capital and deliver reliable electricity to Nigerians,” Edun said.
