Nigeria’s electricity distribution companies (DisCos) failed to collect ₦669.49 billion from electricity bills issued to customers in 2025, highlighting persistent revenue and liquidity challenges across the power sector, the Nigerian Electricity Regulatory Commission (NERC) has disclosed.
According to NERC’s 2025 Annual Report, DisCos supplied electricity valued at about ₦3.68 trillion during the year but billed consumers approximately ₦2.99 trillion. Of the amount billed, only ₦2.32 trillion was successfully collected.
The figures translate to a collection efficiency of 77.60 per cent, meaning that DisCos recovered about ₦77.60 for every ₦100 worth of electricity billed to customers.
Uncollected revenue rises by 24.7 per cent
The latest figures show that the value of unpaid electricity bills increased considerably compared with the previous year.
NERC reported that DisCos left ₦536.95 billion uncollected in 2024. The amount rose to ₦669.49 billion in 2025, representing an increase of ₦132.54 billion, or 24.7 per cent.
The increase has raised concerns about the financial sustainability of the electricity distribution segment, particularly because DisCos require steady revenue to maintain networks, settle market obligations and invest in infrastructure.
NERC said the continuing gaps in billing and collection were weakening the liquidity of the Nigerian Electricity Supply Industry (NESI) and limiting its ability to support fresh investment.
Electricity worth ₦694.8bn also went unbilled
The revenue problem extends beyond customers who failed to pay their bills.
NERC disclosed that electricity worth approximately ₦694.80 billion was supplied but not billed to consumers during 2025.
The regulator put the sector’s gross billing efficiency at 81.14 per cent, based on the difference between electricity supplied and the amount ultimately billed.
This means the distribution companies faced two major challenges during the year: electricity that was supplied but not converted into customer bills, and bills that were issued but not converted into revenue.
Both problems reduce the amount of money available to support the electricity value chain.
Pressure on the electricity market
The financial challenges facing DisCos also have implications for other participants in the electricity market.
NERC said the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator issued gross invoices of about ₦1.72 trillion to DisCos in 2025 for energy costs and administrative services.
DisCos remitted approximately ₦1.63 trillion, representing 94.80 per cent of their obligations, leaving a shortfall of ₦89.58 billion.
The figures illustrate how revenue shortfalls at the distribution end can affect the financial position of the wider electricity market.
Metering and billing remain major issues
The latest report has also renewed attention on the need to improve electricity metering and billing accuracy.
Accurate metering allows DisCos to determine how much electricity individual customers consume and reduces disputes associated with estimated billing.
NERC has continued to push for improved metering, stronger revenue collection and better consumer protection as part of efforts to strengthen the electricity market.
The Federal Government also approved ₦28 billion under the Meter Acquisition Fund Tranche B in 2025 to support the procurement and installation of prepaid meters.
Collection efficiency needs improvement
Although a 77.60 per cent collection efficiency means DisCos recovered more than three-quarters of the value of their bills, the size of the outstanding amount demonstrates the scale of the challenge.
The sector cannot achieve long-term financial stability if a significant portion of electricity supplied to consumers does not generate corresponding revenue.
Improving payment collection would provide DisCos with additional resources to maintain distribution networks, replace ageing equipment, reduce faults and expand electricity access.
It could also improve their ability to meet financial obligations to other participants in the power market.
Energy theft and commercial losses
Electricity theft and other commercial losses remain among the issues affecting the financial performance of the distribution sector.
Illegal connections, meter bypasses, inaccurate customer records and other forms of energy losses can prevent DisCos from recovering the full value of electricity supplied.
NERC’s quarterly reports have continued to identify billing and collection losses as important components of the sector’s overall technical, commercial and collection losses.
Addressing these problems will require cooperation among DisCos, consumers, regulators, security agencies and other stakeholders.
Implications for investment
The revenue gap has wider implications for Nigeria’s ambition to attract fresh investment into the electricity sector.
Investors require confidence that electricity companies can generate sufficient revenue to maintain operations and repay financing.
When distribution companies struggle to collect payments, their capacity to invest in infrastructure and attract additional capital is weakened.
NERC has therefore stressed the importance of improving the financial liquidity of the Nigerian Electricity Supply Industry.