Local News
Nigeria Approves ₦4 Trillion Debt Refinancing Plan To Stabilise Power Sector
Nigeria’s federal government has approved a phased plan to refinance ₦4 trillion ($2.61 billion) in electricity sector debt, in a move aimed at stabilising the nation’s struggling power industry and boosting supply.
The debt — owed primarily to 27 power generation companies for unpaid invoices dating back to 2015 — has long hindered investment in the sector and contributed to chronic power shortages in Africa’s most populous nation.
President Bola Tinubu authorised the repayment strategy following a recent verification of claims, with the Federal Executive Council giving the green light on Wednesday.
Finance Minister Olawale Edun, speaking after a cabinet meeting in Abuja, said the refinancing process would be completed within three to four weeks under the supervision of the Debt Management Office.
“It is now fully approved, and we move to implementation,” Edun stated, noting that the repayment is expected to be structured through bond issuances and other financial instruments to ease the immediate fiscal burden.
The move forms part of broader reforms in the electricity sector, which include a 35% reduction in subsidies and tariff adjustments for urban consumers — measures projected to save the government approximately ₦1.1 trillion ($718.58 million) annually.
With the refinancing plan and reform measures in place, the government hopes to restore investor confidence, enhance power generation capacity, and gradually improve electricity supply for households and businesses.