* International customers owe over $8.5m in 3 months
Nigeria’s power sector suffered another setback in the second quarter of 2025 as both energy generation and offtake declined by over five per cent.
This comes as the electricity distribution companies (DisCos) recorded a combined revenue loss of N158.05 billion in the same quarter.
The sector also faced liquidity strain as bilateral customers both domestic and international failed to remit over N1.4 billion and $8.5 million respectively to the electricity market, according to the Nigerian Electricity Regulatory Commission (NERC).
According to the Commission’s 2025/Q2 report, the average hourly generation on the national grid fell by 5.65 per cent, dropping from 4,770.59MWh/h in Q1 to 4,501.06MWh/h in Q2, translating to a total generation of 9,830.31GWh.
Similarly, the average energy offtake by DisCos at their trading points declined by 199.32MWh/h (5.27 per cent) from 3,781.94MWh/h in Q1 to 3,582.62MWh/h in Q2.
The Commission attributed the fall in generation partly to reduced energy demand from grid-connected customers, including DisCos
Despite receiving 7,824.43GWh of energy, DisCos billed only 6,449.82GWh to end-use customers, reflecting an energy accounting efficiency of 82.43 per cent. NERC noted that the billing inefficiency, with weak collection performance, continues to erode market liquidity.
The Commission reported that inefficiencies in energy accounting, billing and collections continue to erode the financial stability of the power sector, despite slight improvements in market remittance.
The report showed that the weighted average Aggregate Technical, Commercial, and Collection (ATC&C) loss across all DisCos stood at 37.92 per cent, far exceeding the 20.54 per cent target under the 2025 Multi-Year Tariff Order (MYTO). This inefficiency resulted in a cumulative N158.05 billion revenue shortfall for the quarter.
“The weighted average ATC&C loss across all DisCo in 2025/Q2 was 37.92per cent, comprising technical and commercial loss (18.39per cent) and collection loss (23.93per cent). The ATC&C loss of 37.92per cent is 17.38pp higher than the 2025 MYTO target (20.54 per cent per cent) and translates to a cumulative revenue loss of 158.05 billion across all DisCos.
“While this marks a 1.69 percentage point improvement from the 39.61 per cent loss recorded in the first quarter, only Eko DisCo achieved its performance target, with Kaduna DisCo recording the worst performance 70.98 per cent against a target of 21.32 per cent,” the report stated.
DisCos collectively billed customers N742.34 billion out of an energy offtake worth N909.59 billion, translating to a billing efficiency of 81.61 per cent. However, total revenue collected stood at N564.71 billion, representing a 76.07 per cent collection efficiency, slightly up from 74.39 per cent in Q1.
On remittance performance, DisCos collectively remitted N399.20 billion of their N417.35 billion cumulative upstream invoices to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operator (MO), reflecting a 95.65 per cent compliance rate, a marginal drop from 95.86 per cent recorded in the previous quarter.
However, bilateral and international customers showed significantly weaker compliance. The report revealed that six international bilateral customers paid only $9.01 million out of a total invoice of $17.54 million, leaving a shortfall of $8.53 million, a remittance rate of 51.33 per cent.
Similarly, domestic bilateral customers remitted N1.4 billion out of N2.8 billion invoiced, leaving an outstanding balance of over N1.4 billion, or a 50.1 per cent remittance rate.
“International bilateral customers purchasing power from the grid-connected GenCos made a cumulative payment of $9.01 million against the $17.54 million invoice issued to them by the MO for services rendered in 2025/Q2 (remittance rate 51.33per cent).
Similarly, the domestic bilateral customers made a cumulative payment of N1,401 million against the N2,796.29 million invoice issued to them by the MO for services rendered in 2025/Q2 (remittance rate 50.10per cent),” it added.
The Guardian, however, gathered that the persistent underperformance of bilateral customers poses a growing liquidity risk to the market, undermining the intent of the bilateral trading framework to enhance cost recovery and relieve pressure on bulk trading arrangements.
