The Federal Government says it will clear outstanding legacy debts owed to power generation companies by 2027, while promising to prevent fresh arrears and protect vulnerable electricity consumers
The Federal Government has reaffirmed its commitment to improving electricity supply across Nigeria, pledging to settle outstanding legacy debts owed to power generation companies (Gencos) and implement measures to prevent a recurrence of accumulated arrears.
The Minister of Power, Joseph Tegbe, disclosed this at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos, where he said the government had paid approximately ₦1.23 trillion of the outstanding debts through bonds.
According to the minister, the remaining balance is expected to be cleared in 2027.
Tegbe said the government’s intervention was aimed not only at settling inherited financial obligations but also at addressing the structural challenges that have continued to undermine the electricity sector.
He stressed that preventing the accumulation of fresh debts would be essential to restoring investor confidence, improving liquidity across the power value chain and creating an environment capable of attracting the investment required to strengthen electricity generation and supply.
The minister also reiterated the government’s commitment to protecting vulnerable consumers as reforms in the electricity sector continue.
The settlement of legacy debts is expected to ease some of the financial pressures confronting power generation companies, which depend on payments for electricity supplied to the national grid to sustain operations and maintain generating infrastructure.
However, the government’s broader objective of delivering reliable electricity to households, businesses and industries will depend on more than debt repayment. Improvements in transmission infrastructure, distribution networks, metering, revenue collection and the financial sustainability of the entire power sector will also be critical.
The administration of President Bola Ahmed Tinubu says its electricity-sector reforms are intended to support economic growth, attract private investment and improve access to reliable power under its Renewed Hope Agenda.
While the planned clearance of the remaining legacy debts represents a significant financial commitment, Nigerians will be looking for measurable improvements in electricity supply, reduced outages and greater reliability for homes and businesses.
The government has indicated that its priority is to ensure that the settlement of old obligations is accompanied by lasting financial discipline, so that fresh arrears do not undermine the sector’s recovery.