By Yahaya Umar
Three international bilateral electricity customers under Nigeria’s power market failed to fully settle their bills in the fourth quarter of 2025, a report by the Nigerian Electricity Regulatory Commission ,NERC, has disclosed.
According to the Q4 Report by NERC, the outstanding balance is over $9.5m.
The report indicates that the customers paid a total of $10.895m out of the $20.44m invoice issued for services rendered during the period. This translated to a remittance rate of 53.28%.
The three main international bilateral customers purchasing grid-connected power from Nigeria are the national utilities of Benin, Togo, and Niger.
They are; Elles sont Société Béninoise d’Énergie Électrique ,SBEE,– Bénin; Compagnie Énergie Électrique du Togo ,CEET, – Togo; et Société Nigérienne d’Électricité ,NIGELEC, Niger.
They purchase electricity generated by Nigerian GenCos under cross-border bilateral agreements, delivered via the grid.
Also, the report stated that Domestic bilateral customers performed relatively better, remitting N3.51bn out of a N4.17bn invoice, representing 84.23% compliance.
The data also details the Federal Government’s growing financial burden in sustaining the electricity market, as tariff shortfalls continue to be covered through subsidies.
According to NERC, in the fourth quarter of 2025, the government absorbed about N418.79bn, which is roughly 52% of total generation costs.
This, the Commission said, was due to the continued freezing of end-user tariffs at July 2024 rates.
NERC stated that the intervention reduced the invoice payable by electricity Distribution Companies ,DisCos, to the Nigerian Bulk Electricity Trading Plc ,NBET, to N386.13bn, despite the total generation cost for the period standing at N804.93bn.
Meanwhile, the sector recorded a subsidy burden of N418.79 billion in the fourth quarter of 2025, even as electricity distribution companies ,DisCos, posted a strong remittance performance of 93.04%.
This is according to the latest report released by the Nigerian Electricity Regulatory Commission ,NERC.
The figures highlight the continued dependence on government support to sustain the electricity supply amid non-cost-reflective tariffs.
The report reflects a mixed performance across the sector, with improved remittance levels coexisting alongside a significant subsidy burden.
NERC data shows a decline in subsidy obligations alongside strong remittance performance by DisCos.
The Federal Government’s subsidy stood at N418.79 billion in Q4 2025.
This represents a decrease of N39.96 billion from N458.75 billion recorded in Q3 2025.
“The government subsidy accounted for 52.30% of the total GenCo invoice, which is a 6.60pp decrease compared to 2025/Q3, when the subsidy accounted for 58.63% of the total GenCo invoice”.
“The key driver of this reduction is the increase in energy allocated to Band A customers from 40% to 45% to reflect the strategic direction of the government to improve the quality of supply to consumers”, NERC noted.
Despite the reduction, subsidies remain a major component of the electricity market structure.
President Bola Ahmed Tinubu, in June 2023, assented to the Electricity Act 2023, a landmark legislation originally passed by the National Assembly in July 2022.
The new Act replaces the Electric Power Sector Reform Act 2005 and introduces a comprehensive framework to guide the post-privatisation phase of the Nigerian Electricity Supply Industry ,NESI. It is also designed to attract increased private sector investment into the power sector.
A major feature of the law is the removal of electricity from the Exclusive Legislative List, effectively decentralising the sector.
This reform allows state governments, private companies, and individuals to generate, transmit, and distribute electricity independently, thereby breaking the long-standing monopoly at the national level.
The Act is expected to drive competition, improve service delivery, and expand access to electricity across the country by enabling subnational and private participation in power infrastructure development.
However, despite these structural reforms, Nigeria’s electricity sector continues to grapple with deep-rooted financial challenges, particularly around pricing and cost recovery.
For years, the sector has relied heavily on government subsidies due to persistent tariff shortfalls:
Electricity tariffs have remained below cost-reflective levels, creating significant revenue gaps across the value chain.
The Federal Government has consistently intervened to cover these shortfalls, ensuring the continued operation of the market.
Ongoing reforms have sought to balance improved cost recovery with the need to keep electricity affordable for consumers.
Performance across the 11 DisCos varied during the quarter.
Abuja, Eko, Enugu, Ikeja, and Port Harcourt DisCos recorded 100% remittance.
Yola ,99.42%, Benin ,98.30%, and Ibadan ,95.58%, also showed strong performance.
Kano ,75.14%, Jos ,49.80%, and Kaduna ,40.73%, recorded significant shortfalls.
Quarter-on-quarter, Benin and Kaduna improved slightly, while Kano and Jos recorded the steepest declines.
NERC attributed the reduction in subsidy partly to increased energy allocation to Band A customers, which rose from 40% to 45%.
In February, the Federal Government announced plans to share the electricity subsidy costs with other tiers of government, like the state and local governments, from 2026, thereby ending the burden of carrying the subsidy in the power sector.
FG said the president wants electricity subsidy costs to be explicit, practical and transparent, warning that no level of government should carry hidden or unpaid obligations.
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