The Federal Government has paid N1.23 trillion of its outstanding debts to electricity generation companies through bonds and plans to settle the remaining balance in 2027, as part of efforts to strengthen Nigeria’s power sector and improve electricity supply.

Minister of Power Joseph Tegbe disclosed this at the Harvard Business School Association of Nigeria Energy Conference in Lagos, where he reaffirmed the government’s commitment to addressing financial challenges affecting the electricity industry.

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Tegbe said the government intended to clear the outstanding obligations and prevent fresh unpaid bills from accumulating across the sector.

According to the minister, settling the debts would help restore confidence among investors and encourage additional funding for electricity generation and related infrastructure.

He added that the government was working to improve the use of the electricity Nigeria could generate, with the broader objective of delivering more reliable power to homes and businesses.

The N1.23 trillion payment represents part of the Federal Government’s outstanding obligations to electricity generation companies, which play a central role in supplying power to Nigeria’s electricity market.

Tegbe said plans were in place to pay the remaining balance in 2027, although he did not provide a specific figure for the outstanding amount in the information reported.

The government also aims to prevent new arrears from building up, an issue that can affect the finances of power-sector operators and their ability to sustain operations and investment.

Clearing the debts is expected, according to the minister, to improve investor confidence and support the development of a more financially stable electricity industry.

However, the payment alone does not guarantee an immediate improvement in supply, which also depends on generation capacity, transmission infrastructure, distribution networks and other operational challenges.

Tegbe reaffirmed the Federal Government’s commitment to providing reliable electricity while protecting vulnerable Nigerians.

He said the administration’s plans were aligned with President Bola Tinubu’s Renewed Hope Agenda, which seeks to improve electricity access for households, businesses and industries to support economic activity.

Reliable power remains an important concern for Nigerian households and businesses, many of which face interruptions that increase operating costs and disrupt daily activities.

The government’s proposed debt settlement is intended to address one of the financial challenges confronting the sector, while encouraging investors to support its expansion.

The planned completion of payments in 2027 will be a key step in the government’s effort to address its outstanding obligations to electricity generation companies.