The Federal Government has approved a phased plan to refinance ₦4 trillion ($2.61 billion) in electricity sector debt as part of efforts to stabilise the nation’s power industry, improve supply, and attract new investment.
The debt, owed primarily to 27 power generation companies for unpaid invoices dating back to 2015, has long stalled investment in the sector and contributed to Nigeria’s chronic electricity shortages.
President Bola Tinubu authorised the repayment strategy after a recent verification of claims, with the Federal Executive Council granting approval on Wednesday.
Speaking after the cabinet meeting in Abuja, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the refinancing would be completed within three to four weeks under the supervision of the Debt Management Office.
“It is now fully approved, and we move to implementation,” Edun stated, explaining that the repayment would be structured through bond issuances and other financial instruments to minimise the immediate fiscal burden.
The initiative is part of broader electricity sector reforms, which also include a 35% reduction in subsidies and tariff adjustments for urban consumers measures projected to save the government about ₦1.1 trillion ($718.58 million) annually.
Officials say the refinancing plan and accompanying reforms are designed to restore investor confidence, expand power generation capacity, and gradually improve electricity supply to households and businesses nationwide.
