The Nigerian Electricity Regulatory Commission (NERC) has reported that all 11 electricity distribution companies (DisCos) in Nigeria missed their 2026 loss reduction targets in the second quarter. The DisCos recorded an estimated revenue loss of N129.07 billion, according to NERC's Second Quarter 2026 report. The report tracked the aggregate technical, commercial, and collection (ATC&C) losses of the DisCos against the targets set in the Multi-Year Tariff Order (MYTO).
In the second quarter, the DisCos collected N603.64 billion of the N744.67 billion billed, achieving a collection efficiency of 81.06 per cent. This represents a 2.11 percentage point increase from 78.95 per cent in the first quarter. Benin recorded the highest collection efficiency at 92.68 per cent, followed by Ikeja at 92.20 per cent and Eko at 89.39 per cent. On the other hand, Kaduna, Jos, and Kano recorded the lowest collection efficiencies.
The NERC report explained that a DisCo that meets its allowed ATC&C loss target earns more on its tariffs, while one that misses the target cannot earn the revenue on which its tariffs were set. The Commission warned that excess losses cannot be passed on to customers and may compromise the long-term financial positions of the affected DisCos. The DisCos' combined ATC&C loss was 36.23 per cent in the quarter, 19.31 percentage points above the 16.92 per cent target used to set tariffs for 2026.
The estimated revenue loss of N129.07 billion equals 17.60 per cent of the N733.20 billion the DisCos were expected to earn in the period. The report attributed the aggregate loss to 21.33 per cent in technical and commercial losses and 18.94 per cent in collection losses. Although the result showed a slight improvement from the first quarter, when ATC&C loss stood at 37.44 per cent and the revenue loss was N140.64 billion, the gap between actual losses and target narrowed from 20.52 percentage points to 19.31.
Kaduna DisCo recorded the widest gap, with ATC&C losses of 67.70 per cent against a target of 18.18 per cent, a shortfall of 49.52 percentage points. Kano and Jos also recorded significant shortfalls, with Kano's losses rising by 15.35 percentage points, the sharpest deterioration in the sector. In contrast, six DisCos improved on their first-quarter performance, with Ibadan cutting its losses by 8.07 percentage points and Port Harcourt by 6.39.
The NERC report also showed that Eko DisCo came closest to its target, with ATC&C losses of 21.00 per cent against 14.19 per cent, a gap of 6.81 percentage points. Ikeja and Abuja each recorded losses of less than 30 per cent, while Yola DisCo posted 54.04 per cent against a target of 29.00 per cent. The report indicated that Kano took in more energy in the quarter, with the naira value of energy not disclosed.
Key points
- The DisCos' combined ATC&C loss was 36.23 per cent in the quarter, 19.31 percentage points above the 16.92 per cent target used to set tariffs for 2026.
- The estimated revenue loss of N129.07 billion equals 17.60 per cent of the N733.20 billion the DisCos were expected to earn in the period.
- Six DisCos improved on their first-quarter performance, with Ibadan cutting its losses by 8.07 percentage points and Port Harcourt by 6.39.
