By Chibuzor Alli
Nigeria’s 11 electricity distribution companies recorded N129.07bn in cumulative revenue losses in the second quarter of 2026 as technical, commercial and collection inefficiencies remained significantly above regulatory targets, despite collecting N603.64bn from customers.
The figure was contained in the latest report by the Nigerian Electricity Regulatory Commission, which showed that the DisCos’ weighted average Aggregate Technical, Commercial and Collection (ATC&C) losses stood at 36.23 per cent during the quarter.
The loss level was more than twice the 16.92 per cent target set under the 2026 Multi-Year Tariff Order (MYTO), leaving the distribution companies 19.31 percentage points above the regulatory benchmark.
The NERC report stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”
Although the loss ratio improved from 37.44 per cent in the first quarter, the sector continued to record substantial gaps between electricity received, energy billed and payments collected.
DisCos collect N603.64bn from customers
The DisCos collected N603.64bn from customers during the quarter after billing them N744.67bn for electricity supplied.
Their collection efficiency consequently stood at 81.06 per cent, an improvement of 2.11 percentage points from the 78.95 per cent recorded in the first quarter.
However, N141.03bn of billed electricity remained uncollected during the three-month period.
The improvement in collections came despite lower electricity offtake. Average energy received by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in Q2, from 3,309.48MWh/h in Q1.
That represented a decline of 112.45MWh/h, or 3.40 per cent.
Despite the lower offtake, the DisCos achieved an overall offtake performance of 94.07 per cent against partially contracted available capacity of 3,398.41MWh/h.
Energy accounting gap persists
The distribution companies received 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh.
The report stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”
The electricity off-taken by the DisCos was valued at N946.57bn, while the value of energy billed to customers stood at N744.67bn.
This produced a billing efficiency of 78.67 per cent, down from 79.24 per cent in Q1.
The figures highlight a persistent gap across the distribution chain, with substantial amounts of electricity received by DisCos not translating into equivalent volumes of electricity billed and, subsequently, revenue collected.
Kaduna records biggest target gap
All 11 DisCos missed their ATC&C loss targets during the quarter, according to NERC.
Kaduna DisCo recorded the widest gap between its actual performance and regulatory target.
The report said, “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.
The performance of the distribution companies remains a major factor in the financial health of Nigeria’s electricity market, as losses and weak collections affect the ability of DisCos to meet their obligations to other market participants.
DisCos owe N24.94bn in market obligations
The NERC report also showed that the DisCos had upstream invoices totalling N410.38bn during the quarter.
Of the amount, N326.46bn represented generation costs owed to the Nigerian Bulk Electricity Trading Company, while N83.92bn covered transmission and administrative services provided by the market operator.
The DisCos remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator.
This left an outstanding balance of N24.94bn and resulted in a market remittance performance of 93.92 per cent, slightly below the 94.08 per cent recorded in Q1.
The Federal Government accounted for about 50 per cent, or N321.26bn, of the total generation costs through subsidies linked to the continued freezing of end-user electricity tariffs at the rates applicable in July 2024.
International customers pay less than half of invoices
The report also revealed a significant payment gap among international bilateral electricity customers.
Three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during Q2.
Their remittance rate was therefore 46.02 per cent.
Domestic bilateral customers performed considerably better, paying N6.91bn out of N7.55bn invoiced by the market operator, representing a remittance rate of 91.54 per cent.
The Q2 figures point to a mixed performance across Nigeria’s electricity distribution market: customer collections improved and overall ATC&C losses edged down, but substantial billing gaps, unpaid obligations and losses above regulatory targets continued to weigh on the sector.
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