The Presidency on Thursday clarified controversy surrounding the approval of a ₦3.3 trillion plan by President Bola Tinubu, to settle verified legacy debts owed to Power Generation Companies (GenCos) between February 2015 and March 2025.
The initiative, under the Presidential Power Sector Financial Reforms Programme, aims to stabilise the power grid and improve electricity supply, with ₦223 billion already disbursed.
A statement issued on Sunday by the special adviser to the President on information and strategy, Bayo Onanuga, stated that implementation of the repayment plan has already begun, with 15 power plants already signed settlement agreements totalling ₦2.3 trillion.
The approval, however, soon generated controversy among GenCos, who asked Tinubu to clarify how the Federal Government arrived at the reported ₦3.3 trillion debt, raising concerns over discrepancies between the figure and reconciled industry records.
Reservations were made over the computation of the debt figure, noting that it does not correspond with amounts previously agreed upon during reconciliation exercises involving market participants and government agencies.
In response to their demand, a statement by The Presidency noted that the debt settlement approval is geared towards addressing financial challenges in the power sector, not a reward beyond service delivery.
“The Federal Government of Nigeria is implementing a structured and balanced reform programme to address longstanding financial challenges in the power sector.
“At the core of this effort is a market-based settlement mechanism designed to restore the sector, not reward accumulated claims that extend beyond verifiable service delivery. The objective is to ensure fairness to operators while also protecting the interest of the Nigerian public.
“Between 2015 and 2025, the sector accumulated approximately ₦4.7 trillion in claims across the electricity value chain.
“Following a Presidential stakeholder meeting in July 2025, where the claims of N4.7trillion were presented, a thorough review was recommended by President Bola Tinubu. On August 15, 2025, a ₦4 trillion fiscal cap was approved by the Federal Executive Council, following which a comprehensive verification process was undertaken to verify claims.
“This resulted in a 30 percent reduction in claims, leading to a final negotiated settlement of ₦3.3 trillion, reflecting only valid and contract-backed obligations.
‘To ensure sustainability and avoid fiscal pressure, the settlement is being implemented through a phased, market-based financing framework”, the statement read in part.
The Presidency noted that a total series consisting of I Programme Size approximately ₦1.23 trillion will be implemented, adding that disbursement of series I, phase I (January 2026), with ₦501 billion raised from the domestic capital market, is already underway.
The Presidency confirmed that a total of ₦223 billion has been disbursed to GenCos and gas suppliers, while ₦197 billion is in process, largely for gas-related obligations.
It noted that all disbursements are phased and conditional, based on verified claims, signed settlement agreements, and completed documentation.
It explained that as of January 8, 2026, five GenCos covering 14 power plants had signed settlement agreements valued at approximately ₦827 billion.
The list of GenCos who have signed the agreement increased to 17 as of March 31, 2026 – eight GenCos (two public and six private), covering 17, valued at approximately ₦2.28 trillion.
“This reflects growing alignment and participation across the sector.
“The financial settlement is also being implemented alongside broader reforms designed to strengthen the sector, including targeted support to ensure affordability for poor and vulnerable households, and tariff reforms aligning higher service bands with cost-reflective pricing to support investment and improve service delivery.
“The programme is designed to restore liquidity, stabilise generation, improve reliability, and reposition the sector for long-term sustainability.
“It also reflects a shift from unverified claims to disciplined, transparent, and market-backed obligations.”
The Presidency noted that the payment is not a one-off intervention but a structured effort to reset the financial and operational foundations of Nigeria’s power sector.
“The Federal Government remains committed to ensuring that the reforms deliver a stable, reliable, and investable electricity market for the benefit of all Nigerians”, the statement added.
The Chief Executive Officer of the Association of Generation Companies of Nigeria (APGC), Joy Ogaji, had raised an alarm over the parameter used by Tinubu’s presidency to arrive at N3.3 trillion verified legacy debt.
She faulted the move, saying that GenCos were not carried along.
The confusion comes amid the recent N501 billion power sector debt resettlement bond recently announced by the federal government.
