NERC 2025 Unpaid Electricity Report Nigeria: N1.36 Trillion Lost

• The Nigerian Electricity Regulatory Commission (NERC) reported N1.36 trillion worth of electricity was either lost or went unpaid in 2025.
• Out of N3.68 trillion worth of electricity generated, only N2.31 trillion was collected by distribution companies (DisCos).
• Billing efficiency stood at 81.14%, with N694.8 billion lost due to commercial factors like energy theft and poor accounting.
• Collection efficiency was 77.60%, meaning N669.49 billion in billed electricity remained unrecovered from customers.
• Nigeria's average allowed electricity tariff of $0.08/kWh is significantly lower, representing only 42.11% of the average tariff in comparable African nations.

The combined effect of significant billing and collection inefficiencies has profoundly impacted the financial liquidity of the Nigerian electricity industry.

A recent assessment by the Nigerian Electricity Regulatory Commission (NERC) for 2025 reveals a staggering N1.36 trillion worth of electricity that went unremunerated or was lost across Nigeria's power grid. This substantial figure underscores significant financial challenges within the nation's electricity supply industry (NESI), impacting its overall viability and potential for growth.

The Nigerian Electricity Regulatory Commission report indicates that while the total value of electricity generated during 2025 amounted to N3.68 trillion, only N2.31 trillion was successfully collected by the 11 electricity distribution companies (DisCos). This considerable gap highlights systemic issues in both the delivery and monetization of power across the country. The N1.36 trillion shortfall is a composite of two primary loss categories: energy lost between generation and distribution networks, and revenue lost from bills issued to customers that ultimately remained unpaid.

Specifically, NERC's findings detail that N694.8 billion worth of electricity was lost during transmission from generation plants to the DisCos' networks. An additional N669.49 billion represented bills that were issued to electricity consumers but were not recovered. These figures collectively paint a picture of severe commercial risks and operational inefficiencies that continue to plague the Nigerian power sector, necessitating urgent and comprehensive interventions.

The NERC 2025 unpaid electricity report Nigeria further dissects the operational challenges, revealing critical inefficiencies in both billing and collection processes. The total energy supplied by all DisCos in 2025 was valued at N3.68 trillion, yet the total amount billed to customers was N2.9883 trillion. This translates to a national billing efficiency of just 81.14%, indicating a substantial N694.8 billion billing loss.

This significant billing deficit is primarily attributed to a combination of factors, including energy theft, inadequate energy accounting practices, and the DisCos' inability to bill at the weighted average allowed tariff. Among the distribution companies, Eko DisCo demonstrated the highest Nigeria electricity billing efficiency 2025 at 95.41%, while Yola DisCo recorded the lowest at 60.99%. Following the billing stage, the report highlights further challenges in revenue recovery. Out of the N2.98 trillion billed to customers, only N2.31 trillion was collected, leaving an outstanding balance of N669.49 billion.

This translates to a collection efficiency of 77.60%, meaning that for every N100 worth of energy billed to customers by DisCos in 2025, approximately N22.40 remained unrecovered. The DisCo collection losses Nigeria vary significantly, with Eko (87.90%) and Ikeja (87.89%) DisCos achieving the highest collection efficiencies, while Kaduna DisCo recorded the lowest at 45.68%. These persistent collection inefficiencies, compounded by billing issues, severely undermine the financial health of the industry.

The combined effect of significant billing and collection inefficiencies has profoundly impacted the financial liquidity of the Nigerian electricity industry. This precarious financial state directly limits the NESI's capacity for growth and its ability to attract much-needed new investments, perpetuating a cycle of underdevelopment and unreliable power supply. The Nigeria energy sector commercial losses, including energy theft and poor accounting, contribute directly to this liquidity crisis, making the sector less appealing to potential investors.

Adding to these internal challenges, the NERC report also highlights a stark disparity in electricity tariffs compared to other African nations. In 2025, the average allowed customer tariff in Nigeria stood at $0.08 per kilowatt-hour (approximately N124.30/kWh). This figure represents only 42.11% of the average tariff charged in a selection of other countries, which was $0.19/kWh.

For context, average electricity prices in other African nations include $0.27 (N399.73) in South Africa, $0.22 (N323.03) in Burkina Faso, $0.18 (N265.50) in Ghana, and $0.14 (N207.98) in Ivory Coast. Consumers in Mali pay $0.23 (N342.20), Mauritius $0.13 (N191.75), Senegal $0.19 (N286.15), Sierra Leone $0.25 (N373.18), Uganda $0.16 (N238.95), Kenya $0.22 (N327.45), Rwanda $0.18 (N258.13), Gabon $0.22 (N321.55), Namibia $0.15 (N227.15), and Togo $0.22 (N321.55). This significant tariff differential further complicates the financial recovery and sustainability of Nigeria's electricity sector.

This NERC report signals persistent financial instability and significant commercial risks, including energy theft and collection inefficiencies, within Nigeria's electricity sector. Lawyers advising DisCos or potential investors should scrutinize financial viability and regulatory compliance, while compliance officers should review measures against energy theft and ensure robust billing practices.

Source: Original reporting via Daily Trust