Nigeria authorizes a plan to refinance $2.6 billion in debt related to the electrical sector
Nigeria’s finance minister said the country has accepted a phased plan to refinance 4 trillion naira ($2.61 billion) in electricity sector debt. This will help fix the country’s broken power industry and make supply better.
The debt, mostly due to 27 power generation companies for bills not paid between 2015 and 2023, has stopped investment in the industry and made power outages worse in Africa’s most populous country.
President Bola Tinubu promised to settle the claims after they were checked out recently. On Wednesday, he agreed to the plan.
After a cabinet meeting in Abuja, the country’s capital, Olawale Edun, the finance minister, said that the refinancing would happen in three to four weeks, with the debt management office in charge.
“It is now fully approved, and we move to implementation,” he said.
Bonds and other assets will probably be used as part of the plan to spread out the repayment obligation over time.
This is in line with larger sector reforms, such as cutting power subsidies by 35% and raising rates for people in cities. These changes are expected to save the government about 1.1 trillion naira, or $718.58 million, a year.
