The physical and financial losses in Nigeria power sector (Part III)

The Physical and Financial Losses in Nigeria’s Power Sector (Part III): 5.11 TWh Unbilled, ₦637.5 Billion Uncollected

In Parts I and II, we followed Nigeria’s grid electricity from installed capacity to available capacity and actual generation, using Nigerian Electricity Regulatory Commission (NERC) data from April 2025 to March 2026. Of 13,625 megawatts (MW) installed, only about 5,174 MW was available on average and about 4,312 MW was generated.

Part III now examines the electricity that reached the eleven Distribution Companies (DisCos): how much was accounted for and billed, how much of the bills became cash, and why some DisCos perform much better than others.

Electricity Received, Billed and Cash Implications

During the twelve months, the DisCos received about 30.31 terawatt-hours (TWh) of electricity at their trading points but billed customers for only about 25.20 TWh. About 5.11 TWh—more than five billion kilowatt-hours, or “units” as consumers commonly call them—did not become billed energy. In other words, for every 100 units received by the DisCos, about 83 units were billed to customers and roughly 17 were not.

The unbilled electricity reflects a combination of physical losses through distribution lines and transformers and commercial losses arising from inaccurate metering, unmetered consumption, meter bypass, erroneous billing, poor customer enumeration and electricity theft.

Across the four quarterly reports, NERC’s reported values for electricity supplied to the DisCos sum to about ₦3.69 trillion. Dividing that value by the 30.31 TWh received gives an implied weighted-average value of about ₦121.68/kWh. This is not a wholesale tariff or an NBET invoice rate, but an analytical average derived from NERC’s reported energy and monetary values.

Customer bills totalled about ₦3.00 trillion for 25.20 TWh of billed energy, implying an average billed rate of about ₦119.07/kWh. Because customers pay different tariffs according to service band and customer category, this is also a weighted system-wide average rather than a uniform retail tariff.

Roughly ₦688 billion of potential billing value therefore did not become customer bills. Of the approximately ₦3.00 trillion actually billed, only about ₦2.36 trillion was collected, leaving roughly ₦637.5 billion uncollected.

The DisCos therefore converted about 81.4% of the value of electricity supplied into customer bills and collected about 78.8% of those bills. Put together, only about 64% of the original value of electricity supplied became collected revenue.

Put simply, for every ₦100 worth of electricity supplied to the DisCos, only about ₦81 became customer bills. Roughly ₦17 of the original ₦100 was billed but not collected, leaving only about ₦64 in cash.

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