Fresh controversy has emerged over the Federal Government’s renewed approval of N3.3tn to settle longstanding debts in Nigeria’s power sector, as power generation companies insist that no payments have been received despite similar assurances nearly two years ago.
Our correspondents report that the Federal Government has on two separate occasions announced plans to clear N3.3tn owed to power generation companies, covering liabilities that have accumulated since 2015.
In May 2024, the Minister of Power, Adebayo Adelabu, announced that President Bola Ahmed Tinubu had approved a gradual payment of debts estimated at over N3.3tn within the electricity market.
According to Adelabu at the time, about N1.3tn owed to power generation companies would be paid through a combination of cash injections and promissory notes, while around $1.3bn owed to gas suppliers would be settled through cash payments and future royalties.
The announcement came during a period when gas suppliers cut supply to power plants over unpaid legacy debts, triggering widespread blackouts across the country in the first quarter of 2024.
Adelabu had said the government had already begun paying part of the cash component and was working to settle the balance through debt instruments over a period of two to five years.
However, a fresh statement released on April 6, 2026, by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, reiterated that the President had approved a repayment framework under the Presidential Power Sector Financial Reforms Programme.
Onanuga said the debt accumulated between February 2015 and March 2025, and after verification, N3.3tn was agreed as the full and final settlement figure.
He disclosed that implementation had already begun, with 15 power plants signing settlement agreements totalling N2.3tn.
“The Federal Government has already raised N501bn to fund these payments. Out of the amount, N223bn has been disbursed, with further payments underway,” Onanuga stated.
Despite these assurances, stakeholders in the power sector have raised concerns about the lack of visible payments and inconsistencies in the debt figures announced by the government.
The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said the generation companies were unclear about how the Federal Government arrived at the N3.3tn figure.
“I don’t know how they arrived at N3.3tn. Recall that the FG once said it was N2.3tn; later they said N2.8tn, and now N3.3tn. We don’t know how the government arrived at that figure,” Ogaji said.
She noted that during discussions between power producers and the President in July 2025, the government had approved N4tn to address the sector’s debt burden.
Ogaji also warned that gas suppliers have threatened to halt supply unless generation companies are able to settle their obligations.
According to her, gas companies had already stopped supplying gas to some thermal power plants over an estimated N3.3tn owed by power generation companies, further worsening the electricity shortage.
The ongoing dispute has coincided with a sharp decline in electricity output. National power generation has reportedly fallen from about 5,000 megawatts in 2025 to around 3,000 megawatts in the first quarter of 2026.
Ogaji explained that the debt crisis originated from the failure of the Nigerian Bulk Electricity Trading Plc to fully pay generation companies for electricity produced since the sector’s privatisation.
According to her, the Federal Government currently owes generation companies about N6.8tn, with roughly 70 per cent of the debt linked to thermal power plants.
She further explained that the debt profile has continued to grow due to persistent monthly shortfalls in payments.
“From 2015 to December 2024, the debt profile grew to N4tn. In each month of 2025, there is a shortfall of N200bn, which adds N2.4tn, bringing the total debt to N6.4tn by December 2025,” Ogaji said.
“With the additional shortfalls recorded in early 2026, the debt rose to about N6.8tn by February and could reach N7tn by the end of March.”
Earlier this year, the government also launched a debt reduction effort through a N501bn bond issuance coordinated by Nigerian Bulk Electricity Trading Plc.
According to the Special Adviser to the President on Energy, Olu Verheijen, the first phase of the programme involved five power generation companies operating 14 plants nationwide signing settlement agreements.
The companies include First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.
Verheijen said the negotiated settlement for the five firms amounts to N827.16bn, which will be paid in four phased instalments.
However, industry stakeholders maintain that no direct payments have yet reached the generation companies, raising questions about the effectiveness of the government’s debt resolution strategy.
