DisCos collect N1.13tr in six months amid N314.35b revenue shortfall

By : Waliat  Musa

Date: 7 January 2026 7:34am WAT

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Electricity substation

Electricity substation

NERC laments over five million customers without meters Electricity Distribution Companies (DisCos) have collected a total of N1.13 trillion from customers during the second and third quarters of 2025, reflecting a 4.63 percentage-point improvement in revenue collection efficiency.

Despite the gains, according to the third quarter (Q3) quarterly report from the Nigerian Electricity Regulatory Commission (NERC), the sector continues to grapple with a combined revenue shortfall of N314.35 billion.

The data, covering 11 DisCos, underscores both progress and persistent challenges in revenue recovery, which remain central to addressing liquidity constraints in the Nigerian power sector.

According to NERC, in Q3 of 2025, all DisCos collected N570.25 billion out of N706.61 billion billed, translating to 80.70 per cent collection efficiency. This marks an increase from 76.07 per cent in Q2, when N564.71 billion was collected out of N742.34 billion billed.

At an aggregate level, the improvement reflects a 4.63pp increase in collection efficiency between Q2 and Q3, driven by a combination of operational adjustments and targeted recovery efforts.

From April to June 2025, DisCos recovered N564.67 billion, comprising N197.08 billion in April, N188.70 billion in May, and N178.89 billion in June. Collections for the third quarter rose to N570.28 billion, with N190.52 billion in July, N187.47 billion in August, and N192.29 billion in September, highlighting a stabilisation trend, particularly in September, the strongest month in the six-month period.

DisCo performance varied significantly across the country. Ikeja DisCo recorded the highest collection efficiency of 100 per cent in Q3, while Eko had 88.74 per cent, Benin had 86.44 per cent, and Abuja had 81.60 per cent, which also exceeded 80 per cent. At the lower end, Kaduna DisCo recorded the lowest efficiency at 45.67 per cent.

Quarter-on-quarter, seven DisCos improved efficiency with Ikeja (+17.58pp), Port Harcourt (+8.83pp), Yola (+8.72pp), Abuja (+5.24pp), Jos (+4.90pp), Eko (+0.94pp), and Benin (+0.89pp). Conversely, four DisCos recorded declines, with Kaduna (-2.70pp) and Ibadan (-1.34pp) showing the most significant drops.

DisCos like Ikeja and Eko have benefited from legacy recoveries and concentrated revenue drives, while northern and some mid-sized DisCos lag due to infrastructure gaps, energy theft, and billing inefficiencies.

Despite the improved efficiency and rising collections, the combined revenue shortfall for Q2 and Q3 stood at N314.35 billion with N177.68 billion in Q2 and N136.34 billion in Q3.

The uncollected revenue highlights the ongoing liquidity challenges in the sector, as DisCos continue to operate below optimal cash flow levels, constraining their ability to invest in network expansion and maintenance.

NERC noted that while efficiency gains in Q3 are encouraging, the shortfall underscores structural challenges, including technical and commercial losses, and gaps in metering coverage.

Aggregate Technical, Commercial, and Collection (ATC&C) losses continue to challenge the sector. The report indicates that ATC&C losses across all DisCos in Q3 were 33.27 per cent, exceeding the allowed aggregate efficient loss target of 20.54 per cent under the Multi-Year Tariff Order (MYTO) 2025.

NERC highlighted that accurate customer metering remains the most effective way to boost revenue collection and reduce losses.

“The most proven methods to improve energy accounting and revenue recovery are accurate customer enumeration and the installation of end-use customer meters. The commission issued the order on the operationalisation of Tranche A of the Meter Acquisition Fund in 2024/Q2. The Order directed DisCos to utilise the first tranche of disbursement from the MAF scheme to procure and install meters for unmetered Band A customers within their franchise areas.

It lamented that over five million Nigerian electricity customers are still without meters, leaving them dependent on estimated billing by distribution companies (DisCos).

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