DisCos’ Revenue Hits N1.2trn, but Nigerians Still Struggle for Electricity

Nigeria’s electricity distribution companies collected N1.2 trillion from consumers in the first half of 2026, representing an increase of about 450 per cent from N218.16 billion recorded in the corresponding period of 2018, even as electricity supply grew by less than five per cent.

The widening gap between revenue and power availability has intensified questions about the performance of the country’s privatised electricity sector, 13 years after private investors took over generation and distribution assets.

Data from the Nigerian Electricity Regulatory Commission (NERC), analysed by Financial Vanguard, showed that electricity supply rose by only 4.8 per cent, from 16,861 gigawatt-hours (GWh) in the first half of 2018 to 17,668GWh in the first half of 2026.

During the same period, average available generation capacity plunged by 41 per cent, from 7,565.5 megawatts (MW) to 4,456MW.

The figures also showed that DisCos failed to collect N700.53 billion in the first half of 2026, receiving electricity worth approximately N1.9 trillion from the market but collecting just N1.2 trillion from consumers.

The developments raise concerns about the relationship between revenue collection, investment in electricity infrastructure and the quality of supply delivered to households and businesses.

N2.32trn collected in 2025 as electricity supply falls

The revenue-supply disparity is also evident in the annual figures.

NERC data showed that DisCos’ revenue increased by approximately 666 per cent, from N302.925 billion in 2016 to N2.3188 trillion in 2025.

By comparison, annual electricity supply rose by 31.6 per cent, from 23,742GWh to 31,251GWh, while average daily generation increased by about 36 per cent, from 3,276MW to 4,475MW.

Revenue climbed steadily from N370.456 billion in 2017 to N542.729 billion in 2020, before reaching N775.336 billion in 2021 and N841.811 billion in 2022.

Collections subsequently crossed N1 trillion, reaching N1.0775 trillion in 2023, N1.6597 trillion in 2024 and N2.3188 trillion in 2025.

Electricity supply, however, declined sharply last year. After reaching 37,093.70GWh in 2024, annual supply fell by approximately 15.7 per cent to 31,251GWh in 2025, despite the increase in DisCos’ collections.

The Rural Electrification Agency estimates that about 85 million Nigerians remain without access to electricity, underscoring the scale of the country’s access challenge.

Thirteen years after privatisation, questions remain

Nigeria privatised most of its power generation and distribution assets in November 2013, transferring power plants and 11 distribution companies to private investors while retaining public control of the transmission segment.

The reform was expected to improve efficiency, attract investment and strengthen electricity delivery.

However, more than N10 trillion in public investment later, concerns persist about whether the sector has delivered improvements commensurate with the resources committed to it.

In 2016, the average available generation capacity of 27 power plants was 7,527MW, while actual average generation stood at 3,276MW.

By 2025, installed capacity had exceeded 13,000MW, but average available capacity had fallen by 28.3 per cent to 5,398MW. Average generation, meanwhile, increased to 4,475MW.

The figures highlight a persistent challenge: installed capacity does not automatically translate into electricity that can be generated, transmitted and reliably delivered to consumers.

N6trn debt weighs on power sector

The sector’s financial problems have also affected generation companies, with outstanding Federal Government obligations reportedly reaching approximately N6 trillion at the end of 2025.

The Federal Government has turned to bond financing to settle verified legacy debts owed to GenCos and address pressure arising from electricity tariff subsidies.

NERC’s 2025 industry report put the government’s gross tariff subsidy obligation at N1.928 trillion, equivalent to 57.44 per cent of NBET’s total invoice for the year.

The monthly average was N160.69 billion, with quarterly obligations of N536.40 billion in the first quarter, N514.36 billion in the second, N458.76 billion in the third and N418.79 billion in the fourth.

The annual figure was slightly lower than the N1.949 trillion recorded in 2024.

In September 2026, the government signed a N728.979 billion Series 2 bond under its N4 trillion Power Sector Debt Reduction Programme.

The package comprised N402 billion in cash bonds and N326.979 billion in non-cash bonds allocated to participating generation companies.

NBET Managing Director and Chief Executive Officer, Akin Odeyemi, said the company had begun settling participating GenCos and their associated gas companies following the bond issuance.

He described the transaction as a significant step towards implementing the Presidential Power Sector Debt Reduction Programme under President Bola Ahmed Tinubu.

“The settlement is being undertaken through a combination of N402,000,000,000.00 in Cash Bonds and N326,979,000,000.00 in Non-Cash Bonds, in accordance with the approved settlement framework,” Odeyemi said.

Minister cites recent improvements in supply

Despite the concerns reflected in the longer-term data, Minister of Power Joseph Tegbe said electricity generation and transmission had improved over the preceding months.

He acknowledged that some communities continued to experience poor supply but said the government was implementing measures to strengthen the electricity value chain.

“Operational record reports show generation and transmission above 5,000MW over the past couple of weeks, compared to the 3,700 to 4,700MW range before June, and a generation peak of 5,330MW during August and September,” Tegbe said.

“Our next task is to sustain these gains and translate them into more dependable supply at customer level. We are aware that a national peak alone cannot describe the experience of every community.”

He said the government was focusing on stabilising the value chain, restoring market discipline and strengthening governance.

Among the interventions, he cited the restoration of the 375MW Alaoji open-cycle power plant after three years offline.

He also pointed to transformer upgrades in Lagos at Apapa, Ijora, Alausa and Lekki, which unlocked 672MW of transmission capacity, and a new 300MVA transformer at Katampe, Abuja, which added another 240MW.

On electricity access, Tegbe said 62 solar and mini-grid installations had been completed across 30 states through the REA and its partners. The projects provided approximately 43.6MW of installed solar capacity and 41,735 new connections, reaching an estimated 208,000 people.

‘We have not completed power sector reform’

Special Adviser to the President on Power and Chairman of the Presidential Task Force on Power Sector Reset and Restoration, Dr Lanre Babalola, said Nigeria’s electricity reforms remained incomplete.

He argued that the country’s challenge went beyond insufficient generation capacity to the failure to consistently convert available power into dependable electricity and sustainable investment.

“Our deeper problem is that we have not yet built a system capable of consistently converting available capacity into reliable electricity, commercial value and sustainable investment,” Babalola said.

He explained that although generation and distribution assets had been privatised and NBET established as a bulk trader, the country had yet to complete its transition to a competitive electricity market.

“The single-buyer model was conceived as a transitional mechanism. NBET provided a credible intermediary while market participants developed the creditworthiness required for direct contracting.

“But a transitional mechanism becomes a structural constraint if the transition never happens. The objective cannot be to preserve the institutions of transition indefinitely. The objective must be to complete the transition.”

‘Nigerians have been paying for darkness’

Reacting to the revenue figures, power sector lawyer and Sage Consulting Lead Consultant, Bode Fadipe, said the figures raised serious questions about the value electricity consumers were receiving for their payments.

“What this data has just confirmed is that Nigerians have been paying for darkness,” he said.

Fadipe blamed inadequate investment for the limited improvement in electricity supply and argued that the figures supported NERC’s directive requiring DisCos to retain part of their revenue for infrastructure investment.

“You will recall that the DisCos vehemently protested this order, but NERC thankfully insisted on the implementation of the order,” he said.

He called for stronger enforcement of the directive, regular monitoring and forensic audits to determine whether funds earmarked for investment had been properly spent.

“NERC must dutifully enforce its order on investment. NERC must also set timelines for certain levels of improvement,” Fadipe said.

He also urged the regulator to work with electricity market participants to strengthen debt recovery.

Consumers question billing and infrastructure charges

Consumer rights advocate and Executive Director of the Electricity Consumer Protection Advocacy Centre, Chief Princewill Okorie, said increased revenue collections should be examined alongside the quality of service delivered to customers.

He identified estimated billing, infrastructure charges and alleged violations of regulatory directives as continuing concerns for electricity consumers.

Okorie alleged that some communities had been required to contribute money towards transformers and other distribution infrastructure despite regulatory obligations on DisCos.

He said poor payment by consumers should not automatically be accepted as an explanation for inadequate service without examining how bills were generated and whether they were justified.

“The appropriate question to ask is: how did they generate these bills? Were they justifiably, accountably and transparently generated?” he said.

Okorie called for stronger regulatory enforcement, greater consumer awareness and a dedicated mechanism to investigate alleged violations.

He also questioned claims about government subsidies, arguing that consumers frequently contribute to the cost of distribution equipment, including poles, cables and transformers, without reimbursement from the utilities.

With DisCos’ revenue climbing sharply while supply remains uneven, the central question facing the industry is whether higher collections will translate into measurable investment, improved infrastructure and more reliable electricity for Nigerians.

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