Discos revenue collection dips in June, rakes in N182.11b

The financial strain on electricity distribution companies (DisCos) may not abate anytime soon. This is because collection of bills, a core source of their revenue, has continued to dip.

According to the latest report on Discos revenue collection released by the Nigerian Electricity Commission (NERC) for the month of June 2025, DisCos recorded a drop in their revenue collection for the month of June 2025, as their total intake dropped to N182.11 billion, representing a 4.93 percent intake from the N191.57 billion recorded in May.

The figures, contained in NERC’s Commercial Performance of Distribution Companies Factsheet for June 2025, revealed that while DisCos billed customers N237.85 billion for energy consumed, only 76.57 percent of the billed amount was actually collected. This marked a slight improvement compared to the 73.17 percent collection efficiency recorded in May.

Eko DisCo emerged the top performer, raking in N33.18 billion, followed closely by Ikeja Electric with N32.66 billion, and Abuja DisCo with N30.11 billion. On the contrary, Yola DisCo collected N2.96 billion, Kaduna Electric managed N3.62 billion, while Jos DisCo raked in N5.71 billion, to emerge as the lowest revenue performing utilities.

The declining revenue collections by Discos is not unconnected with the lingering challenges in the country’s power sector, including poor service delivery and the hydra-headed problems associated with consumer metering.

For instance, the Chief Executive, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that the declining revenue collection by Discos poses a big risk to their operational health and sustainability. This malaise, he argued, may lead to illiquidity of the utilities.

“There are huge commercial losses arising from massive electricity theft and general indiscipline regarding payment for electricity consumed. Regrettably government agencies are some of the major culprits. Unpaid electricity bills by these agencies runs into several billions of naira.

“Then there is the issue of tariffs which the Discos have argued are not cost reflective. Social and political considerations have been impeding the introduction of cost reflective tariffs. All of these have combined to create an incredible sustainability challenge for the Discos and the entire power sector,” the CPPE boss said.

According to Yusuf, several factors are responsible for the unhealthy situation which the utilities have found themselves. One of these he noted to be that investments made were based on assumptions which have turned out to be unrealistic.

“The biggest risk to the health and sustainability of the DISCOS is illiquidity which is fast degenerating to insolvency. First the investments were based on assumptions which turned out to be unrealistic. Most of those assumptions have collapsed in the course of time.

“Besides, the risks of the business were not properly evaluated from the outset, some of which have now crystallised, creating major challenges for the companies. Political and macroeconomic risks were very significant.

“There was also the case of weak technical capacity and knowledge of the investors about the power sector. The knowledge and capacity gaps was a major challenge because many of the investors have very little knowledge about the power sector. It is not easy to manage an industry you do not understand,” he explained.

Yusuf noted that there were also concerns about the transparency of the privatisation process as the debt financing component of the acquisition was very high. “Many of the Discos were heavily leveraged because the debt financing component of their acquisition was high. Subsequently, with a huge debt service burden in a high interest rate environment, it became a nightmare for the companies,” he explained, adding that “it has become inevitable for the government to do some heavy lifting to pave the way for the emergence of a power sector that can support the economic and social objectives of the government.”

Similarly, the Chairman of the Electricity Consumers Association of Nigeria, James Chijoke, criticized the DisCos for failing to provide value to customers. He argued that the majority of electricity users are still unmetered, forcing them to pay for power they did not consume under the guise of estimated billing system.

“With over half of customers not metered in the sector, most are paying for services they did not receive. Estimated billing means customers continue to pay high rates for electricity whether there is supply or not. It is an unfair practice that must be urgently stamped out by the government,” Chijoke said.