Felix Onyeka
NIGERIA’s electricity distribution companies failed to capture about ₦1.36 trillion in expected revenue for 2025, while worsening power sector liquidity problems.
The revenue gap was as a result of unbilled electricity and unpaid customer bills which undermined the financial stability of the power sector.
The disclosure is contained in the 2025 Annual Report of the Nigerian Electricity Regulatory Commission (NERC), released by the regulator as its comprehensive review of developments in the Nigerian Electricity Supply Industry (NESI) during the year.
According to the report, the 11 DisCos supplied electricity valued at approximately ₦3.68 trillion to consumers in 2025 but billed only about ₦2.99 trillion, leaving electricity worth ₦694.8 billion outside the billing system.
Of the amount billed, the DisCos collected about ₦2.32 trillion, leaving a further ₦669.49 billion outstanding.
The figures translated to a gross billing efficiency of 81.14 per cent and a collection efficiency of 77.60 per cent, meaning that for every ₦100 worth of electricity billed to consumers, only about ₦77.60 was recovered.
The revenue weakness was reflected in the sector’s aggregate technical, commercial and collection performance.
NERC reported a weighted average ATC&C loss of 37.03 per cent, significantly above the 20.54 per cent target under the 2025 Multi-Year Tariff Order.
The regulator’s figures also exposed the persistent metering challenge confronting the industry.
As of December 2025, Nigeria had 12.16 million active registered electricity customers, but only 6.97 million, or 57.27 per cent, were metered.
This left approximately 5.20 million customers, representing 42.73 per cent, without meters.
The DisCos installed 972,040 meters during the year, with Ibadan Electricity Distribution Company recording the highest deployment at 180,256 meters, while Yola DisCo recorded the lowest at 14,231.
Notably,Customer dissatisfaction also remained pronounced.
DisCo customer complaint units received 708,699 complaints during the year, with metering, billing and service interruptions accounting for the majority of the complaints. At NERC’s own Customer Complaints Unit, 8,305 complaints were recorded.
The liquidity challenge extended into the wholesale electricity market.
NERC said the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator issued gross invoices of about ₦1.72 trillion to the DisCos for energy and market services in 2025. The DisCos remitted approximately ₦1.63 trillion, leaving a shortfall of ₦89.58 billion.
Government’s intervention in the market also remained substantial. The report put the Federal Government’s electricity subsidy obligation at about ₦1.93 trillion in 2025, equivalent to 57.44 per cent of NBET’s total invoice, amid the policy of keeping customer tariffs below prevailing cost-reflective levels.
Beyond the financial challenges, the report recorded setbacks in grid reliability. The national grid experienced a full system collapse on September 10, 2025, while a partial system collapse occurred on December 29, following a fault on the Benin-Onitsha 330kV transmission line.
Yet, the report also points to growing regulatory activity around decentralised electricity solutions.
NERC issued 194 licences, permits and certifications across the electricity market in 2025, up from 168 in 2024.
The approvals included 64 mini-grid permits, 43 Meter Service Provider approvals, 30 Meter Asset Provider permits and 31 captive power licences, alongside approvals covering distribution networks, off-grid and embedded generation and electricity trading.
The pattern suggests increasing regulatory attention to mini-grids, captive generation and metering as Nigeria seeks alternatives to the limitations of the conventional grid.
However, the scale of the revenue gap underlines the central challenge facing the industry: increasing electricity supply alone will not resolve the sector’s financial problems unless the power delivered to consumers can be accurately metered, billed and paid for.
NERC’s 2025 report therefore presents a sector caught between reform and persistent structural weaknesses, with billions of naira still slipping through gaps in billing, collection, metering and market settlement.
