Power tensions

Nigeria’s power sector shows mixed results: DisCos’ revenues rise, but GenCos struggle. NERC reports $351bn subsidy, warns of growing costs without tariff adjustments.

Nigeria's power sector is demonstrating a mixed financial performance. While electricity distribution companies (DisCos) have reported enhanced revenues and benefited from ongoing policy reforms, power generation firms, such as Geregu Power, are experiencing declining revenues. The Nigerian Electricity Regulatory Commission (NERC) has revealed that the Federal Government's electricity subsidy reached ₦536.4 billion in Q1 2025, marking a 13.7% increase from the previous quarter. This rise is attributed to a continued tariff freeze, despite the upward trend in cost-reflective pricing. The subsidy was facilitated through the DisCos’ Remittance Obligation, with DisCos remitting 95.79% of the ₦370.36 billion invoiced by NBET. NERC has cautioned that these subsidy costs are likely to escalate further unless tariffs are adjusted to align with actual generation expenses.