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Issues With Nigeria’s Cross-Border Electricity Trade Highlighted in NERC Q1 2025


Electricity generation and billing improved significantly in Q1 2025, DisCos’ remittance performance, though better at about 95.8%, still falls short of full market obligations, causing liquidity challenges.

The government’s subsidy burden rose to ₦536.4 billion to bridge tariff shortfalls.
Collection inefficiencies and international payment defaults further strain the system.

NERC continues regulatory efforts to enforce compliance and improve sector transparency and efficiency.

NERC Report 2025

NERC Report 2025

2 days ago






Remittance performance remains a major challenge as the Nigerian Electricity Regulatory Commission, NERC reveals in its Q1 20252 report.

The reports hows a 10.92% increase in electricity generation to 10,304.47 GWh in Q1 2025 (up from 9,289.95 GWh in Q4 2024) mostly due to improved billing. However, Distribution Companies, DisCos’ remittance to Nigerian Bulk Electricity Trading, NBET and Market Operator, MO still falls short of full market obligations.

DisCos are expected to remit 100% of their DisCo Remittance Obligation (DRO) invoices to NBET and MO (for transmission and administrative costs), based on the DisCo Remittance Obligation framework.

Persistent shortfalls in remittance from DisCos affect the ability of NBET and MO to pay Generation Companies (GenCos) and fund grid operations.

The DisCo Remittance Obligation (DRO)-adjusted invoice issued by NBET to DisCos was ₦370.36 billion. DisCos remitted ₦354.77 billion, achieving a 95.79% remittance performance to NBET, which is an improvement but still short of 100%.

The federal government subsidized ₦536.4 billion in Q1 2025 to cover the gap between actual generation costs and tariffs consumers pay, representing 59.16% of the total NBET invoice.

Average DisCos’ Remittance Ratio & Impact on Market Stability

On average, DisCos remitted 95.79% of their invoices to NBET in Q1 2025, reflecting a partial but persistent shortfall. Remittance to the Market Operator (MO) was also substantial but not always full, with an average remittance performance of around 68.5% in some quarters.

Some DisCos performed better than others. Ikeja Electric and Eko Disco had remittance rates above 65%, while others lagged significantly.

The shortfall in remittance affects NBET’s ability to pay GenCos fully and on time. This impacts GenCos’ capacity to maintain operations, invest in infrastructure, and ensure consistent power generation.

The subsidy burden on the government increases as the gap between cost and consumer tariffs widens, with ₦536.4 billion spent on electricity subsidy in Q1 2025, a 13.7% increase from Q4 2024.

Additionally, Nigeria’s cross-border electricity trade suffers, with countries like Benin and Togo owing over $11 million for electricity supplied in Q1 2025, recovering only about 34% of invoiced amounts.

Efficiency in Revenue Collection

Revenue collection improved slightly with DisCos collecting ₦553 billion from consumers in Q1 2025. However, Aggregate Technical, Commercial, and Collection (ATC&C) losses remain high. IBEDC reported an ATC&C loss rate of 24.3% in October 2024, aiming to reduce it below 25% by the end of 2025.

The gap between energy billed and payments made continues to affect remittance, as many consumers, including industrial and international customers, default or pay partially.

Summary

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