GenCos’ Power Invoices Drop by ₦80.56bn in Q3 2025 as Weak Demand Hits Electricity Market

Nigeria’s power generation companies (GenCos) recorded a sharp drop of ₦80.56bn in invoices in the third quarter of 2025, driven largely by weaker electricity demand from distribution companies (DisCos). Data from the Nigerian Electricity Regulatory Commission (NERC) shows that GenCos billed ₦782.46bn in Q3, down from ₦863.02bn in the previous quarter.

The decline followed a 6.08 per cent reduction in energy offtake by DisCos during the period, reflecting ongoing challenges in electricity demand and distribution. This drop in offtake also eased the Federal Government’s subsidy burden, with subsidy obligations falling to ₦458.75bn in Q3 from ₦514.35bn in Q2, according to the regulator.

NERC warned, however, that the existing open-ended subsidy regime continues to expose the government to unpredictable financial obligations. The commission noted that subsidy levels are affected by volumetric risks and changes in the electricity supply mix, adding that increased reliance on thermal power generation typically pushes generation costs higher.

A breakdown of the figures shows that monthly subsidy payments stood at ₦163.7bn in July, ₦153.32bn in August, and ₦141.72bn in September. Under the DisCos’ Remittance Obligation framework, the government bridges the gap between cost-reflective tariffs and approved tariffs by applying subsidies directly to generation costs payable to the Nigerian Bulk Electricity Trading Plc (NBET).

In Q3 2025, the DRO-adjusted invoice from NBET to DisCos amounted to ₦323.70bn, while actual remittances reached ₦308.25bn, representing a strong 95.23 per cent performance. All DisCos achieved full remittance except Kano, Benin, Jos, and Kaduna, although Jos improved compared to the previous quarter. Analysts warn that the continued reduction in energy offtake could strain GenCos further and ultimately limit the amount of electricity delivered to consumers nationwide.

source: PUNCH