President Bola Ahmed Tinubu has approved the payment of N2.8 trillion to power generation companies (GenCos) as the Federal Government's verified liability for accumulated electricity subsidies and legacy debts dating back to 2010.
This decision follows a comprehensive independent audit that validated the verifiable portion of the claims submitted by the GenCos. The audited figure stands significantly below the approximately N6 trillion to N6.6 trillion claimed by the operators, which the President has firmly rejected.
President Tinubu has directed that the Federal Government will not pay one naira beyond the independently verified amount.
The approval underscores the administration's commitment to fiscal discipline, transparency, and prudent management of public resources while addressing critical challenges in the power sector.
The settlement is part of ongoing efforts under the Presidential Power Sector Debt Reduction Programme to restore liquidity, stabilize the electricity value chain, and attract sustained investment for improved power supply across Nigeria.
Highly placed sources in the Presidency and the Federal Ministry of Power confirmed that the audit process was rigorous and evidence-based, ensuring that only legitimate and substantiated claims are honored.
This step builds on earlier initiatives, including the recent issuance of a fully subscribed N501 billion bond under the programme, which has begun settling portions of legacy obligations and boosted confidence among investors and sector stakeholders.
President Tinubu remains steadfast in his Renewed Hope Agenda to reform the power sector, eliminate inefficiencies, and ensure that Nigerians benefit from reliable, affordable, and sustainable electricity.
The administration continues to work closely with all stakeholders including GenCos, gas suppliers, distribution companies, regulators, and labor unions to implement structural reforms that prevent future accumulation of unsustainable debts and promote a viable, market-driven electricity industry.
The Federal Government appreciates the patience and cooperation of power generation companies and other players in the sector as these reforms take root.
Further details on the payment modalities and implementation timeline will be communicated through the appropriate channels in due course.