- The power sector faces ₦97.5bn shortfall, DisCos owe ₦81bn, and international customers owe $12m (₦16.5bn).
- DisCos’ efficiency falls to 74% in Q4 2023 from 76% in Q3 2023, remitting ₦188.7bn out of ₦270bn.
- NERC calls for immediate federal intervention to address financial challenges and improve payment compliance.
The Nigerian Electricity Regulatory Commission (NERC) has urged the Federal Government to address ongoing non-payment and debt issues in the power sector. NERC’s 2023 fourth-quarter report, recently obtained by reporters, highlighted these concerns.
The report revealed a ₦97.5 billion shortfall in Q4 2023. Eleven electricity Distribution Companies (DisCos) and four international customers owe this.
The DisCos alone owe ₦81 billion, while the international customers—Paras SBEE, Transcorp SBEE, Mainstream NIGELEC, and Odu-Pani-CEET—did not pay their $12 million invoice (₦16.5 billion at ₦1,367/$1) for Q4 services.
The DisCos’ debt arises from an upstream invoice of about ₦270 billion for Q4 2023. This invoice includes ₦223 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) company and ₦47 billion for transmission and administrative services by the Market Operator (MO). The DisCos paid only ₦188.7 billion (₦156 billion to NBET and ₦32.5 billion to the MO), leaving an ₦81 billion balance. Their remittance rate reached only 70% in Q4 2023, down from 76% in Q3 2023.
Revenue collection efficiency also declined. DisCos collected ₦294.9 billion out of ₦399.7 billion billed in Q4 2023, resulting in collection efficiency of 74%, down from 76% in Q3 2023.
Additionally, the report notes that the four international customers still need to pay the $12.02 million invoice from the MO for Q4 2023 services.
NERC’s report highlights significant financial challenges in Nigeria’s power sector. The commission calls for urgent federal intervention to ensure sustainability and improve payment compliance from both domestic and international customers.