FG Clears N1.23trn Power Debt, Moves to Stop New Arrears

The Federal Government says it has settled N1.23 trillion in power sector debts and will not allow fresh arrears to pile up again. Minister of Power Joseph Tegbe disclosed this at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos, according to a statement issued on Tuesday.

Tegbe said the objective goes beyond clearing old obligations. The government, he said, is determined to prevent such arrears from building up again so the sector can attract investment and deliver reliable power to homes and businesses across the country.

Gencos Paid, Capacity to Be Fully Used

The minister explained that by clearing its obligations to power generating companies and making full use of available generation capacity, the Federal Government is building a stronger and more investment-ready power sector. He tied the effort to the Renewed Hope Agenda of President Bola Ahmed Tinubu.

Tegbe also reaffirmed the administration's commitment to steady electricity supply for every Nigerian, with vulnerable groups adequately protected.

Why the Debt Cleanup Matters

The arrears owed to Gencos have long been a sticking point in the Nigerian electricity value chain, straining the finances of generators and limiting how much power they can put on the grid. Settling the debt removes one source of pressure on the operators and gives room for more generation to be dispatched.

For businesses and households, the practical test will be whether the cleared arrears translate into fewer outages and steadier supply. For the naira, a power sector that can pay its bills and attract investment reduces the federal government's exposure to repeated bailouts and guarantees in the sector.