At the backdrop of worsening power supply to offices and homes, Electricity Distribution Companies (DisCos) have recorded a combined loss of N2.349 trillion over the past two years due to billing and collection inefficiencies, further worsening the liquidity crisis in the Nigerian Electricity Supply Industry (NESI).

Already burdened by an estimated N6 trillion sector-wide debt as of December 2025, Nigeria’s power industry is edging closer to systemic failure, with several thermal power plants struggling to secure adequate gas supply to sustain generation.

The situation has deteriorated amid persistent financial leakages at the distribution level, undermining the fragile gains recorded in generation and transmission.

Checks by Financial Vanguard on commercial performance data of the Nigerian Electricity Regulatory Commission (NERC) show that DisCos’ losses stood at N1.015 trillion in 2024.

The figure rose sharply by 31.4 per cent in 2025 to N1.334 trillion, bringing cumulative losses for the two-year period to N2.349 trillion.

A breakdown of the 2025 figures indicates that billing inefficiencies accounted for N649.87 billion, while weak revenue collection system resulted in N684.28 billion loss.

Quarterly breakdown shows fluctuations in the size of the losses over the year.

The DisCos lost N378.11 billion in the first quarter of 2025, and N344.7 billion in the second quarter. The figure declined further by 18 per cent to N282.8 billion in the third quarter, before rising again by 16 per cent to N328.54 billion in the fourth quarter.

Cash challenges compounding, birthing blackouts

The worsening liquidity crisis is increasingly reflected in declining power supply, with consumers across the country experiencing more frequent and prolonged outages.

Electricity supply on the national grid has dropped from an average of 4,600 megawatts recorded in 2025 to below 3,500MW in the first two months of 2026.

Industry data show that power Generation Companies (GenCos) are owed over N6 trillion, forcing many plants to operate below capacity or shut down units intermittently.

Gas suppliers have, in turn, scaled back deliveries due to unpaid invoices, worsening the generation shortfall.

The result is a resurgence of rolling blackouts, with DisCos resorting to load shedding to manage limited energy allocations. In several states, electricity supply has dropped to less than 12 hours daily, with some areas receiving as little as four to six hours.

In Abuja, districts such as Karu and Lokogoma receive barely three hours of electricity daily, leaving homes and businesses struggling with rising self-generation costs.

Other states under the Abuja Electricity Distribution Company (AEDC), including Nasarawa, Niger and Kogi, have also been hit by extended outages.

In Delta State, within the Benin Electricity Distribution Company (BEDC) franchise area, power supply remains highly erratic, with many communities receiving less than three hours of electricity daily.

Residents and businesses in Ughelli, Warri, Sapele, Oleh and surrounding areas report persistent outages despite high estimated bills. Entire communities are often plunged into darkness for days without explanation or official communication from the company.

Frustration among residents continues to grow, with many describing the situation as unbearable.

Presidential Villa exits national grid

In a move that underscores the depth of Nigeria’s electricity challenges, the Presidential Villa in Abuja has commenced plans to exit the national grid following the completion of its solar mini-grid project.

The project, estimated at about N17 billion, involves the installation of a dedicated solar hybrid power system designed to guarantee uninterrupted electricity supply to the seat of government.

Officials say the decision is driven by the need to ensure energy security and reduce reliance on the increasingly unstable national grid.

However, the Acting Managing Director of AEDC, Engr Chijoke Okwuokenye, criticised the move, stating that it was not due to the utility’s inability to supply power.

According to him, “The issue is that someone took the decision to run the state house on generators because they couldn’t afford the risk of interruption and this arrangement has lingered for years.

“What I find troublesome is the fact that, with a little more investment in storage and network upgrade, the Villa could easily have been assured uninterrupted power supply. This would have presented better optics and demonstrated confidence and support for the sector.

“Technology has evolved so much that it is very possible to provide uninterrupted reliable power with at most a little premium that is still far cheaper than diesel generation.

“The DisCos are at a point where we can provide premium hybrid solutions that will see us take over even the cost of diesel generation and offer supply guarantees, yet you see a lot of government agencies choosing to run generators, it tells you there is a different interest at stake”, he stated.

Consumers react

Chairman of the Electricity Consumers Association of Nigeria, Chijoke James, accused DisCos of exploiting consumers through estimated billing.

“At the distribution level, sharp practices have persisted for years. Estimated billing remains the most exploitative system in the Nigerian power sector,” he said.

“The outrageous bills issued to customers are the main reason many resist payment. No one is willing to pay for electricity not supplied.

“Some DisCo staff also exploit the situation by extorting consumers under the threat of disconnection without remitting such payments to the company.

“When you see them carrying ladders, it raises suspicion, not of service delivery, but of extortion,” he added.

Expert faults metering gaps, FG responds

Lawyer and Lead Consultant at Sage Consulting on Power Sector Advocacy and Advisory, Mr Bode Fadipe, attributed the inefficiencies largely to inadequate metering and lack of transparency.

He explained that without meters, consumption cannot be accurately determined, leading to estimated billing.

He stated: “Once a customer has no meter, any billing method becomes presumptive and inherently inaccurate.

“If the input data is faulty, the output will also be faulty. This is why disputes over billing persist.” Fadipe noted that some consumers have successfully challenged inflated bills by keeping independent consumption records.

He called for end-to-end metering across the electricity value chain, from generation to transmission and distribution. “Electricity can be measured at every point. Once it is measured, it can be accurately billed. The real solution is comprehensive metering,” he said.

He expressed concern that the Federal Government has not demonstrated enough political will to resolve the financial challenges facing the sector.

“Sector operators are behaving the way they are behaving because they hold the view, rightly or wrongly, that the FG will always provide a bailout for an ailing sector”, he stated. (Vanguard)

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