Electricity Subsidy Hits N471.69 Billion as FG Supports Power Sector

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The Federal Government of Nigeria subsidised electricity with N471.69 billion in the fourth quarter of 2024, representing 57% of the total energy generated during that period. This subsidy was a result of the suspension of the end-use customer tariff at the rates payable in July 2024, according to the Nigerian Electricity Regulatory Commission (NERC).

As stated in NERC’s “Quarterly Report 2024,” “The NBET invoice payable by the DisCos for 2024/Q4 was only N360.97 billion because the FGN has taken responsibility for ~57% (N471.69 billion) of the total generation costs in the form of subsidies arising from the freezing of end-use customer tariffs at the rates payable in July 2024.”

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Both local and international bilateral customers made payments during the fourth quarter of 2024 for outstanding Market Operator (MO) invoices from previous quarters. International bilateral customers paid $2.98 million, while domestic bilateral customers paid N135.81 million.

The total revenue collected by all DisCos in the fourth quarter of 2024 was N509.84 billion out of the N658.40 billion billed to customers, translating to a collection efficiency of 77.44%. This is an increase from the 74.55% collection efficiency recorded in the third quarter of 2024.

NERC noted that Eko and Ikeja DisCos recorded the highest collection efficiencies in the fourth quarter of 2024, at 90.00% and 82.63%, respectively. Conversely, Jos DisCo recorded the lowest collection efficiency at 49.68%

The report also stated that eight DisCos recorded improvements in collection efficiency between the third and fourth quarters of 2024, with Yola and Kano recording the greatest improvements at +13.93pp and +9.88pp, respectively.

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Regarding Aggregate Technical, Commercial, and Collection (ATC&C) Loss, NERC explained that it is a summation of billing losses and collection losses. The weighted average ATC&C loss across all DisCos in the fourth quarter of 2024 was 35.22%, comprising technical and commercial loss (16.34%) and collection loss (22.56%).

This loss was +10.44 pp higher than the MYTO target (24.78%) and translates to a cumulative revenue loss of N139.08 billion across all DisCos. Only Yola and Eko DisCos achieved their target ATC&C, while Kaduna DisCo recorded the worst underperformance relative to the target ATC&C.

In terms of market remittance, the cumulative upstream invoice payable by DisCos in the fourth quarter of 2024 was N408.86 billion. The DisCos collectively remitted a total sum of N378.93 billion, with an outstanding balance of N29.92 billion. This translates to a remittance performance of 92.68% in the fourth quarter of 2024, compared to 83.77% in the third quarter of 2024

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