By Benson Daniel
Nigeria’s electricity sector recorded a combined billing and collection gap of about N1.36 trillion in 2025, highlighting persistent financial challenges across the power value chain.
The figure emerged from the sector’s 2025 performance data, which showed that electricity distribution companies were unable to fully bill and collect payment for the electricity supplied to their customers.
The 11 electricity distribution companies supplied power valued at about N3.68 trillion during the year but billed customers for only N2.99 trillion. This resulted in an estimated N694.8 billion gap in electricity that was supplied but not billed.
The collection challenge was also significant. Of the N2.99 trillion billed to electricity consumers, only about N2.32 trillion was collected, leaving approximately N669.49 billion outstanding.
Combined, the unbilled electricity and unpaid bills amounted to about N1.36 trillion, representing a major revenue leakage for the power sector.
The figures underscore one of the biggest challenges confronting Nigeria’s electricity industry, where weaknesses in metering, billing, payment collection and electricity distribution continue to affect the financial sustainability of distribution companies.
The sector recorded a collection efficiency of 77.6 per cent, meaning that more than one fifth of the value of electricity billed during the year remained uncollected.
Billing efficiency stood at 81.14 per cent, indicating that a significant portion of electricity supplied to distribution companies was not translated into bills issued to customers.
Energy accounting efficiency was recorded at 82.77 per cent. The distribution companies received about 31,251.77 gigawatt hours of electricity at trading points but billed customers for only 25,867.86GWh.
The gap between electricity received and electricity billed reflects the broader technical, commercial and collection losses that continue to weaken the sector.
The combined weighted average of technical, commercial and collection losses stood at 37.03 per cent in 2025, significantly above the 20.54 per cent target set under the year’s tariff order.
Metering also remained a major challenge. Nigeria had about 12.16 million registered electricity customers as of December 2025, but only 6.97 million customers, representing 57.27 per cent, had electricity meters.
This left about 5.2 million customers without meters, creating continued challenges around accurate billing and revenue collection. Distribution companies installed 972,040 meters during the year, but the pace of deployment remained insufficient to close the national metering gap.
The financial difficulties extend beyond the distribution companies. The Nigerian Bulk Electricity Trading Company issued gross invoices of about N1.72 trillion to distribution companies for electricity and related services, while only N1.63 trillion was remitted, leaving a market shortfall of approximately N89.58 billion.
The Federal Government also incurred an electricity subsidy obligation of about N1.93 trillion during the year as part of efforts to cushion consumers from the full cost of electricity supply.
The scale of the financial gaps highlights the need for stronger revenue collection mechanisms, improved metering and more effective management of electricity distribution.
For distribution companies, improving collections is critical to their ability to meet financial obligations across the electricity market. Higher collections would provide additional resources to pay suppliers and support investment in infrastructure and customer service.
For consumers, improved metering and billing transparency could help reduce disputes and strengthen confidence in the electricity market.
The power sector’s financial sustainability will therefore depend heavily on reducing losses, expanding metering, improving payment discipline and ensuring that electricity supplied is accurately accounted for and paid for.
The N1.36 trillion gap recorded in 2025 shows that addressing revenue leakages remains as important as increasing electricity generation and expanding the national grid.
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