Nigeria’s Power Sector Financial Reforms: Setting the Facts Straight

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.
•Total Series I Programme Size: approximately ₦1.23 trillion
•Series I, Phase I (January 2026): ₦501 billion raised from the domestic capital market

Disbursement is already underway:
•₦223 billion has been disbursed to Generation Companies and gas suppliers
•₦197 billion is in process, largely for gas-related obligations

All disbursements are phased and conditional, based on verified claims, signed settlement agreements, and completed documentation.

Implementation Progress
•As at January 8, 2026:
Five (5) Generation Companies covering fourteen (14) power plants had signed settlement agreements valued at approximately ₦827 billion
•As at March 31, 2026:
Eight (8) Generation Companies (2 public and 6 private), covering seventeen (17) power plants, have signed their settlement agreements 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.

Note: This 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.

STATE HOUSE PRESS RELEASE

* @commonwealthsec NAMES @ProfOsinbajo LEADER OF NEXT MONTH'S SIERRA LEONE ELECTIONS OBSERVER GROUP*

*Secretary-General says VP's a senior statesman that understands challenges across West Africa

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Vice President @ProfOsinbajo has accepted the offer of The Commonwealth to lead the Commonwealth Observer Group (COG) constituted by its Secretary-General, the Rt. Hon @PScotlandCSG to observe the general elections in Sierra Leone.

The Secretary-General constituted the observer group, a team of distinguished experts upon the invitation from the Electoral Commission for Sierra Leone for next month's polls in the West African nation.

STATE HOUSE PRESS RELEASE

HISTORY AS PRESIDENT BUHARI COMMISSIONS SEVEN LEGACY PROJECTS ON TUESDAY, MAY 23, 2023

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Following through on his administration’s determination to upgrade and expand the nation’s stock of infrastructure, President @MBuhari will (tomorrow) Tuesday, commission seven legacy projects completed by the Federal Ministry of Works and Housing @FMWHNIG across the country.

Comprising three major Bridges, three Federal Secretariats and a Road, the historic event will be headlined by the Second Niger Bridge which was conceptualized in 2005.

In 2014, there was an attempt to begin the project through Public Private Partnership (PPP) but this was not… twitter.com/i/web/status/1…

ADDRESS BY PRESIDENT @MBuhari AT THE OFFICIAL COMMISSIONING OF THE KASHIMBILLA MULTIPURPOSE DAM, 40MW HYDROPOWER STATION AND ASSOCIATED TRANSMISSION LINE AND DISTRIBUTION SUBSTATIONS (PHASE I), THURSDAY, 18TH MAY, 2023

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I am delighted to be commissioning, today, the Kashimbila Multipurpose Dam, 40MW Hydropower Station and Associated 132KV Switchyard, Transmission Line and Distribution Substation (Phase I) Project.

The Kashimbila Multipurpose Dam in Taraba State, with storage capacity of 500million cubic metres, was conceived principally to checkmate the threat of the imminent collapse of the structurally weak and poisonous Lake Nyos…

The virtual Presidential Commissioning Ceremony of the Kashimbila Multipurpose Dam and Hydropower Project has kicked off.

#GovtAtWorkNG #PMBAtWork

The Kashimbila Dam was built by the Federal Ministry of Water Resources @FMWRNigeria, and the accompanying Power Plant and Transmission Line by the Federal Ministry of Power. The contract for the project was originally awarded in 2007, with a completion period of 36 months.

Chairman, Takum Traditional Council, Ruler, HRH Ephraim Bala Ashumanu: “We thank @NigeriaGov for this Buffer Dam, which has given birth to electricity & water supply. We thank the FGN for all they have done. We want the Project to give employment to the youth of the communities.”

STATE HOUSE PRESS RELEASE

PRESIDENT BUHARI TO INAUGURATE PRESIDENTIAL/VIP WING OF STATE HOUSE MEDICAL CENTRE ON FRIDAY

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As a demonstration of his commitment to advancing healthcare management in the country, President @MBuhari will on Friday, May 19, inaugurate the state-of-the-art Presidential/VIP Wing of State House Medical Centre, Abuja.

This legacy project, situated within the premises of the Presidential Villa, had its ground-breaking ceremony conducted by the Chief of Staff to the President, Prof Ibrahim Gambari, on November 1, 2021.