POWER SECTOR CRISIS: GenCos Kick As President Tinubu Approves ₦3.3 Trillion To Clear Legacy Debt

After criticism by presidential candidate of the Labour Party (LP) in the 2023 election, Peter Obi, President Bola Ahmed Tinubu has announced a plan to offset ₦3.3 trillion power sector legacy debt owed to generation companies.

A statement released on Sunday by presidential spokesperson, Bayo Onanuga, said the ₦3.3 trillion approved payment plan followed due verification of the country’s power sector legacy debt, which has lasted for more than a decade.

The approved payment plan is in addition to the existing pioneer ₦501 billion bond to settle legacy debt, which generation companies said has risen to ₦6 trillion.

“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution.

“Implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion. The Federal Government has already raised ₦501 billion to fund these payments. Out of the amount, ₦223 billion has been disbursed, with further payments underway.

“What this means for Nigerians: With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve.

“And as the sector stabilizes, more investment, more jobs, and better service will follow,” the statement said.

Commenting on the development, Olu Arowolo-Verheijen, special adviser on energy to President Bola Ahmed Tinubu, said, “This program is not just about settling legacy debts. It is about restoring confidence across the power sector—ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably.

“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.”

However, the Association of Power Generation Companies (APGC), has kicked against the development, saying the Federal Government slashed the legacy debt from ₦6 trillion to ₦3.3 trillion.

Reacting to the plan to offset the ₦3.3 trillion debt, Chief Officer of APGC, Dr. Joy Ogaji, asked, “Is verification unilateral in a bilateral agreement?”

Last week Thursday, it was gathered that Peter Obi lashed out at President Tinubu’s handling of the country's power sector crisis.

According to him, the country’s persistent power sector crisis indicates the unfulfilling promises by the President, referencing Tinubu’s electoral promises.

Recall that Nigerians have continued to experience epileptic power supply nationwide for months without any sign of improvement.

Tinubu, as part of his campaign promises, had said he would fix power supply within four years. However, over two years into his administration, the electricity supply crisis has persisted.