Nigeria government has reduced electricity sector debt claims from 4.7 trillion ($3.43 million) to N3.3 trillion ($2.41 million) following a verification exercise, as part of efforts to address issues in the country’s power market.
This was made known through a press release issued by the Presidency of the Federal Republic of Nigeria and shared via X (formerly Twitter) on Thursday.
The move follows a presidential directive issued after a July 2025 stakeholder meeting chaired by the current administration, during which accumulated liabilities across the electricity value chain were presented.
“Between 2015 and 2025, the sector accumulated approximately N4.7 trillion in claims across the electricity value chain. Following a Presidential stakeholder meeting in July 2025 where the claims of N4.7trillion were presented.
“This resulted in a 30 percent reduction in claims, leading to a final negotiated settlement of N3.3 trillion, reflecting only valid and contract-backed obligations,” the source read in part.
What they are saying
The government said the revised N3.3 trillion represents validated and contract-backed obligations owed to generation companies and gas suppliers, following an audit intended to address longstanding concerns around unverified liabilities within the sector.
It stated that the objective was not to dismiss obligations but to ensure that all claims are properly verified and tied to actual service delivery.
The approved N4 trillion ($2.92 million) cap set a limit for the government’s potential obligations and served as a basis for negotiations toward a settlement.
“A N4 trillion fiscal cap was approved by the Federal Executive Council following which a comprehensive verification process was undertaken to verify claims,” according to the statement.
The verification exercise removed claims deemed unsubstantiated or non-contractual, resulting in a 30% reduction in the total figure.
What you should know
Industry data shows that participation in the programme has increased in recent months as more generation companies sign settlement agreements.
As of January 8, 2026, five generation companies, covering 14 power plants, had signed agreements valued at about N827 billion.
By March 31, 2026, this figure rose to eight companies, two publicly owned and six privately owned covering 17 power plants, with total signed agreements reaching N2.28 trillion ($1.66 million)
The agreements cover a substantial portion of the country’s installed generation capacity, particularly gas-fired plants that dominate the grid.
The government noted that the ongoing settlement process will continue in phases, with additional issuances expected under the Series I programme, aimed at resolving legacy debts while establishing a framework within the sector.
