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FG Sets Aside N353m in 2026 Power Budget to Clear Legacy Debts to Contractors

FG Sets Aside N353m in 2026 Power Budget to Clear Legacy Debts to Contractors

The Federal Government has proposed N353.03 million in the 2026 budget of the Federal Ministry of Power to settle outstanding legacy debts owed to local contractors handling ongoing power sector projects across the country.

The provision, listed under “Legacy Debts Owed to Local Contractors”, forms part of the ministry’s proposed N1.107 trillion 2026 budget, aimed at strengthening energy access and improving power transmission infrastructure nationwide.

A breakdown of the budget shows that capital expenditure dominates, accounting for N1.096 trillion, while personnel costs and overhead expenses are estimated at N6.17 billion and N4.21 billion, respectively.

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Beyond debt settlement, the 2026 power budget places strong emphasis on rural electrification and renewable energy deployment. Under the Rural Electrification Agency (REA), the government earmarked N105 million for the Energy Access for University Initiative (EEP O&M), designed to sustain renewable power solutions in tertiary institutions.

In addition, the budget proposes N945 million for the deployment of mini-grid projects to support smart community development across three geopolitical zones. Each of the Northeast, South South and Southwest regions is allocated N315 million under the initiative.

Meanwhile, the Transmission Company of Nigeria (TCN), another agency under the Ministry of Power, proposed N2.51 billion for compensation payments to project-affected persons and communities nationwide.

The compensation funds are intended to cover crops, economic trees and structures affected by transmission line and substation projects, a move expected to accelerate right-of-way access, reduce project delays, and enhance power infrastructure execution across Nigeria.

FG Sets Aside N353m in 2026 Power Budget to Clear Legacy Debts to Contractors

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