The Federal Government says it has paid ₦1.23 trillion towards Nigeria’s ₦3.3 trillion in outstanding power-sector liabilities.
The Minister of Power, Joseph Tegbe, disclosed this at the Nigeria Energy Leadership Summit and Exhibition 2026 in Lagos. He said the government was working to improve electricity supply and strengthen the sector’s financial stability.
The payment forms part of the government’s power-sector debt reduction programme. The initiative aims to settle verified legacy obligations owed to electricity generation companies, known as GenCos.
According to the figures disclosed, approximately ₦2.07 trillion remains outstanding. However, the government must continue addressing the remaining liabilities while preventing new debts from accumulating.
The government has used bond issuances to finance the debt settlement programme. In September, the Federal Government announced a second bond issuance worth approximately ₦728.98 billion.
This followed the first issuance of about ₦501.02 billion in January 2026. Together, the two issuances amounted to approximately ₦1.23 trillion.
The second series included ₦402 billion in cash bonds and ₦326.98 billion in non-cash bonds. Eleven generation companies participated in the second phase, according to the reported transaction details.
The government designed the programme to ease financial pressure across the electricity value chain. Unpaid obligations have affected the ability of power companies to maintain facilities, pay suppliers and invest in additional generation capacity.
Despite the debt settlement, Nigeria’s electricity industry continues to face several structural problems.
These include gas supply constraints, ageing power plants, limited transmission capacity and distribution losses. Together, these challenges affect the amount of electricity available to consumers.
Tegbe said the government was also working to improve operational efficiency and prevent fresh financial leakages. He stressed the need for coordinated investment across electricity generation, transmission and distribution.
The government has also identified improved metering and revenue collection as important parts of its reform efforts. These measures could help reduce commercial losses and improve payments across the electricity market.
The Federal Government says its wider reform programme aims to strengthen the financial sustainability of the power sector. It also wants to attract investment and improve electricity delivery to homes and businesses.
However, debt settlement alone will not resolve every challenge. The sector also needs reliable gas supplies, stronger infrastructure and better revenue collection.
The impact of the programme will therefore depend on how effectively the government addresses these problems. It must also ensure that new liabilities do not replace the debts being settled.
For electricity consumers, the key issue remains whether the financial intervention will lead to more reliable supply. The government’s next steps will be important in determining whether the debt reduction programme delivers lasting improvements.
