FG to clear $2.6b power sector debt to end blackouts, attract investment
The Federal Government will begin a phased refinancing of N4 trillion ($2.61 billion) owed to electricity generation companies in the next month, a move the government says will help revive the struggling power sector and improve nationwide supply.
Finance Minister Olawale Edun said Wednesday that President Bola Tinubu approved the debt settlement plan after verification of outstanding invoices dating back to 2015. The bulk of the arrears is owed to 27 generation firms whose unpaid bills have curtailed investment and worsened power outages in Africa’s most populous country.
Implementation, overseen by the Debt Management Office, is expected within three to four weeks and will rely on bond issuances and other financing tools to ease repayment pressure on government coffers.
Officials say the plan is part of a wider reform package that includes subsidy cuts and tariff adjustments, measures projected to save the treasury N1.1 trillion ($718 million) annually while signalling to investors that the government is committed to a commercially viable power market.
The move comes amid chronic electricity shortages that have hampered economic growth, shut down industries, and left millions reliant on costly generators.
