President Bola Tinubu has approved a sweeping ₦3.3 trillion debt settlement plan for Nigeria’s power sector, as the Federal Government simultaneously ramps-up investment in renewable mini-grids with a fresh ₦9 billion disbursement to boost electricity access across underserved communities.
The twin interventions, announced over the weekend, form part of a broader strategy to stabilise the country’s fragile electricity supply, restore investor confidence, and expand access to reliable power.
In a statement by presidential spokesman Bayo Onanuga, the government said the ₦3.3 trillion approval represents a “full and final settlement” of longstanding legacy debts accumulated over a decade under the ‘Presidential Power Sector Financial Reforms’ programme, spanning February 2015 to March 2025.
The Presidency disclosed that implementation is already underway, with 15 power generation companies signing settlement agreements worth ₦2.3 trillion. So far, ₦501 billion has been raised to fund the initiative, with ₦223 billion already disbursed, while further payments continue.
Special Adviser on Energy, Olu Arowolo-Verheijen, said the intervention goes beyond clearing debts, stressing that it is aimed at restoring confidence across the electricity value chain. According to her, the programme will ensure gas suppliers are paid, power plants remain operational, and the overall system becomes more reliable. She added that the initiative aligns with ongoing reforms such as improved metering and service-based tariffs, as well as prioritised electricity supply for businesses and industries to drive economic growth.
The Government believes that resolving the liquidity crisis will lead to more stable generation and improved service delivery in a sector long plagued by grid collapses, low output, and persistent outages.
Complementing the debt settlement, the Rural Electrification Agency (REA) announced the disbursement of ₦9 billion in financing to two companies for mini-grid deployment across Taraba, Kwara, Kogi, and Niger states. According to REA, the firms received ₦7.95 billion and ₦1.056 billion respectively, as part of ongoing efforts to expand distributed energy solutions, particularly in off-grid and rural communities.
The funding is backed by the Federal Government’s Distributed Access through Renewable Energy Scale-up (DARES) programme, supported by a ₦100 billion performance-based grant facility in partnership with a Nigerian bank.
REA Managing Director, Abba Aliyu, described the development as a sign of growing momentum in Nigeria’s renewable energy space.
He noted that the steady flow of capital into the sector reflects increasing confidence among investors and financial institutions, while also accelerating project delivery and improving access to electricity in underserved areas.
Analysts say the combined approach—clearing legacy debts in the grid-based power sector while investing in decentralised renewable solutions—could help address Nigeria’s long-standing electricity challenges.
With the planned rollout of the next phase of the debt programme, known as Series II, alongside continued mini-grid expansion, the government is betting on a dual-track strategy to deliver more reliable electricity to homes, businesses, and industries nationwide.
