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FG’s Power Reforms Pay Off: $2bn Flows In, Sector Debt Slashed Dramatically

Published by Samuel Ayomide on March 26th, 2026.

Nigeria’s power sector is beginning to show signs of recovery, with the Federal Government announcing over $2 billion in fresh investments and a sharp reduction in long-standing liabilities, in what officials describe as early gains from ongoing reforms.

Minister of Power, Adebayo Adelabu, disclosed the developments in Abuja during the unveiling of the new headquarters of the Nigeria Electricity Liability Management Company (NELMCO), describing the moment as a turning point for the sector’s financial stability and institutional strength.

According to reports monitored by The PUNCH, the government has cut inherited liabilities from over N2.3 trillion to about N146 billion — a reduction Adelabu said reflects “rigorous clean-up efforts” and improved financial discipline within the system.

He noted that beyond the numbers, the reforms are gradually restoring investor confidence, with private capital now flowing into the sector. The minister linked this renewed interest to policy changes introduced under the Electricity Act 2023, which has decentralised the market and empowered states to participate more actively in electricity generation and distribution.

As BusinessDay also reported, at least 16 states have already begun developing their own electricity markets, a move expected to deepen competition and unlock innovation across the value chain.

Adelabu further revealed that NELMCO’s intervention has delivered over N700 billion in savings for the Federal Government through debt reconciliation and verification processes, while also significantly reducing disputed financial claims, including ground rent obligations.

On the operational side, the minister pointed to modest but important gains. Installed generation capacity has risen to about 14 gigawatts, with peak output recently hitting over 5,800 megawatts — figures he said indicate gradual improvement in system performance.

Efforts to tackle Nigeria’s longstanding metering gap are also underway through the Presidential Metering Initiative. Backed by N700 billion in local funding and an additional $500 million facility from the World Bank, the programme aims to deploy millions of meters nationwide, a move widely seen as critical to improving revenue collection and transparency.

Meanwhile, Adelabu highlighted a recent technical milestone — the successful synchronisation of Nigeria’s national grid with regional networks across ECOWAS countries. Energy analysts cited by Nairametrics say the development could pave the way for cross-border electricity trade and strengthen supply reliability in the long term.

Despite these gains, challenges persist. The minister acknowledged ongoing power outages and apologised to Nigerians for the disruptions, attributing them largely to gas supply constraints and infrastructure limitations.

Still, he expressed optimism that ongoing interventions would stabilise supply in the coming weeks, insisting that the broader reform agenda remains on track.

While the sector has historically struggled with inefficiencies and underinvestment, stakeholders say sustained policy consistency and continued private sector participation will be crucial to translating these early gains into reliable, affordable electricity for Nigerians.