DisCos push for first-line budget charge as MDAs’ power debts mount

Nigeria's electricity distribution companies (DisCos) have urged the Federal Government to consider unpaid electricity bills from Ministries, Departments and Agencies (MDAs) as a priority charge when allocating budget funds. The Association of Nigerian Electricity Distributors (ANED) argues that the mounting financial burden due to delayed or unpaid electricity bills by government institutions is straining the DisCos.

ANED's CEO, Mr. Sunday Oduntan, spoke to the News Agency of Nigeria (NAN) about the issue. He emphasized that making electricity bill payments a first-line charge would encourage timely payment and improve the distribution sector's financial health. Oduntan also advocated for enhanced customer service, greater transparency in billing, and stronger accountability measures to ensure DisCos are held responsible for their service delivery.

The call for action follows the ongoing financial challenges faced by the electricity market, including significant debts owed by DisCos to other power sector participants. Nigeria's power sector has been grappling with unpaid government electricity bills, a matter that has sparked disputes between government bodies and DisCos in the past.

The Nigerian Electricity Regulatory Commission (NERC) recently assumed control over Kaduna Electricity Distribution Company (KAEDC) and dismissed its board due to a debt crisis involving nearly N456.5 billion in accumulated market obligations. This situation marks the second-highest quarterly revenue recorded by DisCos in the past five quarters, despite a slight decline in collection efficiency.

Nairametrics has reported that DisCos achieved an aggregate billing efficiency of 82.03% in the fourth quarter of 2025, while still facing N174.12 billion in billing shortfalls. Lower collection efficiency has a ripple effect on the entire electricity value chain, impacting payments to power generators, the Transmission Company of Nigeria (TCN), and gas suppliers.