The Federal Government’s debt to electricity generation companies has reached about ₦6 trillion, raising concerns about subsidy payments, investment and Nigeria’s unreliable power supply.
The Nigerian Electricity Regulatory Commission (NERC), in its 2025 industry report, put the government’s gross electricity tariff subsidy obligation at ₦1.928 trillion for the year. This represented 57.44 per cent of the total invoice issued by the Nigerian Bulk Electricity Trading Plc (NBET).
The subsidy obligation averaged ₦160.69 billion monthly. The government recorded ₦536.40 billion in the first quarter, ₦514.36 billion in the second, ₦458.76 billion in the third and ₦418.79 billion in the fourth quarter. The 2025 total was slightly lower than the ₦1.949 trillion recorded in 2024.
In September 2026, the government signed a ₦728.979 billion Series 2 bond under its ₦4 trillion Power Sector Debt Reduction Programme to settle verified outstanding debts owed to electricity generation companies and improve liquidity across the sector.
The transaction included ₦402 billion in cash bonds raised from the domestic capital market and ₦326.979 billion in non-cash bonds allocated to participating generation companies.
NBET Managing Director and Chief Executive Officer Akin Odeyemi said the company had begun settling participating generation companies and their associated gas suppliers following the bond issuance.
He described the settlement as an important step in implementing the Presidential Power Sector Debt Reduction Programme under President Bola Tinubu.
Meanwhile, Power Minister Joseph Tegbe maintained that electricity supply had improved over the previous three months, although some communities continued to experience poor service.
He said generation and transmission had exceeded 5,000 megawatts in recent weeks, compared with between 3,700MW and 4,700MW before June. He also cited a peak of 5,330MW during August and September.
Tegbe said the government was working to sustain these gains by stabilising the electricity value chain, improving market discipline and strengthening governance. He highlighted the restoration of the 375MW Alaoji power plant after three years offline and upgrades to substations and transformers in Lagos and Abuja.
The government was also expanding renewable energy. According to the minister, 62 solar and mini-grid installations across 30 states had delivered about 43.6MW of solar capacity and 41,735 new connections, reaching an estimated 208,000 people.
However, Dr Lanre Babalola, the President’s Special Adviser on Power, said the sector’s reforms remained incomplete. He argued that Nigeria’s challenge was not simply a lack of generation capacity but the failure to consistently turn available electricity into reliable supply and sustainable investment.
Power sector consultant Bode Fadipe questioned the value consumers received for their payments.
“What this data has just confirmed is that Nigerians have been paying for darkness,” Fadipe said.
He called for stricter enforcement of NERC’s investment directives, closer monitoring of distribution companies (DisCos) and forensic audits to determine whether funds intended for infrastructure were being properly used.
Consumer rights advocate Princewill Okorie also urged stronger regulatory enforcement and better protection for electricity users. He raised concerns about estimated billing, infrastructure charges and reports that some communities had to contribute towards transformers and other distribution equipment.
Okorie called for transparent billing, better public awareness of consumer rights and stronger action against alleged regulatory violations.
