President Bola Tinubu has approved the payment of ₦2.8 trillion in verified electricity subsidy debts owed to power generation companies, following a comprehensive audit that slashed the original ₦6 trillion claim by more than half.

The approval comes after a tripartite review involving key stakeholders in the power sector, which scrutinised the claims before arriving at the validated figure. The government said the debt will be settled through the issuance of bonds, with payments to be phased.

According to officials, the intervention is aimed at improving liquidity within the power sector, enabling generation companies to offset outstanding gas supply debts and invest in critical infrastructure upgrades. The move is also expected to enhance grid stability and overall electricity supply across the country.

The development follows growing concerns over the mounting electricity subsidy burden. Reports indicate that subsidy costs for a 12-month period up to September 2025 reached approximately ₦1.98 trillion.

Industry stakeholders have long warned that unresolved subsidy debts were straining operations across the value chain, particularly affecting gas suppliers and generation companies. The bond-backed settlement is seen as part of broader efforts by the Tinubu administration to stabilise the power sector and address systemic financial challenges.