Nigeria turns to its billionaires as it moves to pay $2.3 billion owed to power firms to fix Africa’s largest power crisis

Nigeria has enlisted billionaire-backed power firms in a 3.3 trillion naira ($2.3 billion) debt settlement programme aimed at stabilising Africa’s largest electricity market and unlocking stalled generation capacity in the country’s struggling power sector.

• Nigeria has launched a $2.1 billion debt settlement programme to stabilise its power sector and unlock stalled generation capacity.
• The initiative includes 15 generation plants from six private companies, including billionaire-backed firms such as Egbin Power Plc and Geregu Power Plc, plus two state-owned entities.
• Despite these efforts, infrastructure constraints like limited transmission capacity and low metering rates continue to hamper the sector.
• Nigeria also aims to expand its electricity exports in West Africa, but payment arrears from neighbouring countries pose ongoing challenges.

Nigeria is taking decisive steps to stabilise its power sector, with a new agreement targeting long-standing payment backlogs that have constrained electricity supply in Africa’s most populous country.

The deal covers 15 generation plants operated by six private companies and two state-owned entities, representing one of the most ambitious attempts by any Nigerian administration to address debts owed to power producers.

Financing push to tackle power deficit

The agreement comes after Nigeria unveiled plans earlier this year to raise about $2.5 billion to address structural challenges in the power sector, including debt repayment and upgrades to transmission and distribution infrastructure.

Olu Verheijen, President Bola Tinubu’s special adviser on energy, said the first tranche of the debt, approximately 501 billion naira ($320 million), was issued earlier in the month at a 17% yield and was fully subscribed, signalling investor appetite for reforms in Africa’s largest power market.

Officials say the debt settlement could unlock up to 4,484 megawatts of idle capacity and stabilise supply for roughly 12 million customers, as Nigeria grapples with persistent outages and grid collapses.

Major generation companies sign on

Billionaire-backed firms lead participation

Among the biggest participants is Egbin Power Plc, a subsidiary of Sahara Power Group, which is part of the broader Sahara Group.

The conglomerate was co founded by Nigerian entrepreneurs Tope Shonubi, Tonye Cole and Ade Odunsi, with Kola Adesina serving as a key executive leader.

Geregu Power Plc, previously controlled by Nigerian billionaire Femi Otedola and the first power generation firm to list on the Nigerian Exchange, also signed onto the programme.

The company’s controlling stake was transferred in December 2025 to MA’AM Energy Limited in a $750 million deal, with the firm reportedly linked to Nigerian Senator Abdul Aziz Abubakar Yari.

Two Transcorp entities, Transcorp Power and Afam Power, are also part of the settlement. Both are subsidiaries of Transnational Corporation of Nigeria Plc, chaired by Nigerian business tycoon Tony Elumelu.

Other participants include First Independent Power Limited, jointly owned by the Rivers State Government and oil majors including Shell, TotalEnergies and Agip, alongside Mabon Limited, which operates a hydropower concession in northern Nigeria.

On the public sector side, Niger Delta Power Holding Company is bringing multiple plants into the arrangement, while Ibom Power Company, owned by the Akwa Ibom State Government, also joined the programme.

Infrastructure constraints continue

Nigeria’s transmission network can handle only about 25% of the country’s projected 13,000 megawatts of available generation capacity, while only around half of grid connected users are metered, according to government estimates.

Analysts say this mismatch between generation, transmission and distribution has created chronic liquidity shortfalls across the electricity value chain.

Since the privatisation of Nigeria’s power assets in 2013, distribution companies have struggled to collect sufficient revenue, leaving generators unpaid and unable to settle gas suppliers.

The result is a sector trapped in a cycle of underinvestment, limited maintenance and reduced output.

Frequent grid failures have forced households and businesses to rely on petrol and diesel generators, as well as solar panels and battery systems, increasing operating costs across Africa’s largest economy and weakening industrial competitiveness.

Nonetheless, even as it seeks to solve problems at home, Nigeria is also positioning itself as a regional electricity supplier within West Africa, although payment challenges remain.

The Nigerian Electricity Regulatory Commission said Togo, Niger and Benin owed Nigeria $17.8 million (25 billion naira) for electricity supplied during a recent reporting period.