Power Subsidy Hits N418.79bn as Nigeria’s Electricity Sector Records Over N300bn in Losses – NERC
Nigeria’s electricity sector faced mounting financial pressure in the fourth quarter of 2025, as the Federal Government’s power subsidy rose to N418.79bn, even while inefficiencies across the value chain pushed total losses above N300bn, according to the Nigerian Electricity Regulatory Commission (NERC).
The commission revealed in its latest quarterly report that electricity generation companies issued invoices worth N804.93bn during the period. However, because tariffs remained below cost-reflective levels, the Federal Government absorbed about 52.30 per cent of the total cost, resulting in a subsidy burden of N418.79bn. Despite this, the subsidy figure reflected a slight reduction of N39.96bn compared to the previous quarter.
NERC also highlighted significant commercial inefficiencies across distribution companies (DisCos). Although electricity worth N969.19bn was supplied, only N795.06bn was billed to consumers, reflecting a billing efficiency of 82.03 per cent. This gap resulted in billing losses of N174.12bn, while additional technical, commercial, and collection inefficiencies contributed another N139.19bn in losses.
Combined, these inefficiencies pushed total sector losses to over N300bn within the quarter. The report further showed that DisCos received 7,991.22GWh of electricity but billed only 6,614.57GWh, underscoring ongoing challenges in energy tracking, revenue collection, and infrastructure performance across the system.
On the operational side, available generation capacity averaged 5,400.38MW, though several plants recorded declines. While generation improved slightly to 9,831.58GWh, grid instability persisted, including frequency and voltage deviations outside acceptable limits and a partial grid collapse recorded on December 29. NERC warned that the current subsidy structure remains financially unsustainable, exposing the Federal Government to rising and unpredictable fiscal pressure.
source: punch