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The Federal Government has raised ₦501 billion as part of efforts to address the estimated ₦4 trillion debt crippling Nigeria’s electricity sector, officials disclosed on Monday.
The funds, according to government sources, were mobilised through a combination of budgetary allocations, financial instruments and targeted interventions aimed at stabilising the power value chain.
The debt, largely owed to generation companies (GenCos) and gas suppliers, has long constrained electricity supply, leading to reduced generation capacity and persistent outages across the country.
Officials said the ₦501 billion injection would be used to partially settle outstanding obligations, restore confidence among investors and improve liquidity within the sector. The move is also expected to support gas supply agreements critical to power generation.
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The Ministry of Power described the development as a step toward broader reforms designed to make the electricity market more sustainable. However, it acknowledged that the amount raised represents only a fraction of the total debt.
Industry stakeholders welcomed the intervention but stressed the need for structural reforms, including cost-reflective tariffs, improved metering and reduction of technical and commercial losses.
Energy analysts warned that without addressing inefficiencies in distribution and revenue collection, further debt accumulation could undermine future interventions.
The Federal Government reiterated its commitment to resolving the sector’s challenges, noting that reliable electricity remains central to economic growth, industrial productivity and improved quality of life for Nigerians.
