The 11 electricity Distribution Companies operating in Nigeria generated a total revenue of N603.64 billion in the second quarter of 2026. This represents an increase from the N597.56 billion recorded in the first quarter of the year. According to the Nigerian Electricity Regulatory Commission, the revenue collected by the power distribution companies translated to an aggregate collection efficiency of 81.06 per cent.
The collection efficiency for the second quarter reflected a 2.11 percentage point increase when compared to the 78.95 per cent collection efficiency achieved in 2026/Q1. The total billing for the second quarter stood at N744.67 billion, while the total billing for the first quarter was N756.93 billion. NERC attributed the under-recovery of issued invoices to persistent market challenges, including customer dissatisfaction with power supply services and inadequate customer metering.
A breakdown of individual Disco performances showed that Benin Disco recorded the highest collection efficiency in 2026/Q2 at 92.68 per cent. Ikeja Disco followed closely at 92.20 per cent, Eko Disco at 89.39 per cent, Port Harcourt Disco at 87.27 per cent, Abuja Disco at 83.45 per cent, and Ibadan Disco at 80.33 per cent. Conversely, Kano Disco logged the lowest collection efficiency across the country at 47.74 per cent.
Despite the marginal revenue gains, the report highlighted a continued strain on public finances. The federal government incurred a tariff subsidy obligation of N321.26 billion in 2026/Q2 to cover the gap between cost-reflective electricity tariffs and allowed consumer tariffs. This represents a 10.34 per cent drop compared to the N358.32 billion recorded in 2026/Q1.
The monthly breakdown of the government’s subsidy obligation for the quarter comprised N108.40 billion in April, N112.93 billion in May, and N99.93 billion in June. The NERC explained that with the absence of full cost-reflective tariffs across all Discos, the government covers the resultant gap in the form of tariff subsidies applied directly at source to the generation cost payable by Discos to the Nigerian Bulk Electricity Trading Plc.
Under the Disco’s Remittance Obligation framework, NBET invoices the portion of generation company costs not covered by consumer tariffs directly to the Federal Ministry of Finance for immediate settlement. During the quarter under review, total Gencos’ invoices issued for energy delivered to all 11 Discos amounted to N647.72 billion. The DRO-adjusted NBET invoice to the power distributors stood at N326.46 billion.
The government subsidy accounted for 49.60 per cent of the total invoices. The Nigerian Electricity Regulatory Commission's report revealed that the power sector continues to face challenges, including customer dissatisfaction and inadequate metering. The commission's data provides insight into the financial performance of the Discos and the government's subsidy obligations in the sector.
Key points
- The 11 electricity Distribution Companies generated N603.64 billion in revenue in Q2 2026.
- The federal government incurred a fresh subsidy debt of N321.26 billion in Q2 2026.
- Benin Disco recorded the highest collection efficiency in 2026/Q2 at 92.68 per cent.
