As Nigeria’s electricity crisis deepens as homes suffer from blackout in the searing heat of March, the federal government made payment of N71.49bn from the total N1.92trn electricity subsidy payment it owed electricity Generating Companies (GenCos) in 2025.
According to documents obtained from the Nigerian Electricity Regulatory Commission (NERC), the government’s payment on its obligation was just 3.7 per cent of the total sumDaily Trust reports that the subsidy obligation by the federal government has stalled in recent times leading to reduction of gas supplied to GenCos which have been lamenting their inability to pay suppliers in order to generate the amount of electricity needed in the country..It would be recalled that the absence of cost-reflective tariffs, the federal government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies
or ease of administration, the subsidy is only applied to the generation cost payable by DisCos to NBET at source in the form of a DisCo’s Remittance Obligation (DRO). The DRO represents the total GenCo invoice that is billed to the DisCos by NBET based on what the allowed DisCo tariffs can cover.
However, the document showed electricity Distribution Companies (Discos) paid 93.80 per cent of the N1.23trn bills issued to them by Gencos during the year.
This means they paid N1.16trn, leaving an outstanding payment of N71.49bn.
In total, an invoice of N3.16trn was issued by GenCos with N1.24trn paid while an outstanding of N1.92trn is being owed.
Giving a breakdown, the document stated that the government did not pay any subsidy from the N536.4bn it incurred in the first quarter of 2025. The document however noted that the sum is included in the N4 trillion bond programme.
But in the second quarter, it paid N76.95bn from the N514.36bn bill issued, leaving an outstanding payment of N437.41bn.
For the third and second quarter, it did not make any payment for the N458.76bn and N418.79bn bills issued.
Also, the document said for January 2026, the government was issued a bill of N126.48bn but it has yet to pay any sum as deposit.
For the DisCos, it said they made payment of N310.9bn from the N325.32bn issued in the first quarter, leaving an outstanding payment of N14.42bn while in the second quarter they paid N287.51bn from the N302.27bn bill issued to them, with a remaining N14.76bn.
In the third quarter, they paid N266.66bn from the bill of N282.12bn, leaving a balance of N15.45bn. In the fourth quarter, N300bn was paid from N326.94bn, remaining N26.86bn.
But for January 2026, the DisCos were able to pay 50 percent of their bill, N126.11bn, from the N252.59bn issued to them.
What the document says
“Out of the N1.92trn owed to GenCos for the energy supplied in 2025, only 3.7% is market shortfall. The remaining N1.85trn is tariff shortfall (i.e., unfunded government subsidy. The only payment that was made towards the 2025 tariff shortfall was N76.95bn in April 2025. While the total DRO-adjusted invoice for DisCos represented only 39.07% of the total GenCo invoice, the DisCos accounted for 93.80% of the total remittance in 2025. The DisCos achieved a 93.80% remittance rate towards DRO invoices for 2025. The cumulative invoice settlement rate for GenCos in 2025 was 39.25%.”