Audit Report: House Approves N248.6bn Reliefs, Debt Restructuring for Kano, Jos, Ikeja Discos

Adedayo Akinwale in Abuja

The House of Representatives has approved financial relief measures and a 10-year debt restructuring framework for the Kano, Jos, and Ikeja Electricity Distribution Companies (DisCos).

The resolution by the House Public Accounts Committee followed the adoption of a technical subcommittee report, which formed part of the 2021 Auditor-General for the Federation’s report on the growing indebtedness of eleven electricity distribution companies as escalated by the Nigeria Bulk Electricity Trading Company Plc (NBET).

The Committee Chairman, Hon. Bamidele Salam urged strict compliance with market obligations by all DisCos to prevent further accumulation of debt.

He warned that without urgent financial restructuring and regulatory intervention the sustainability of Nigeria’s electricity distribution sector could remain at risk.

Also, the Chairman of the technical subcommittee, Hon. Mark Chidi Obetta said the recommendation formed part of legislative efforts to stabilise the electricity market and address legacy liabilities affecting the sector’s financial sustainability.

The framework covers accrued interest on debt from 2015 to September 2025 amounting to N128,575,190,740.54, as well as historical debts totaling N120,061,898,737, bringing the combined outstanding liability to N248,637,089,278.83.

The report, which reviewed the financial obligations of eleven DisCos, showed their cumulative indebtedness rose from N1 trillion from December 31, 2024 to N1.3 trillion on September 25, 2025, comprising both principal and interest components.

Total disco outstanding from January 2015 to September 2025 including interest component as provided by NBET are: Abuja Electricity Distribution Company Ltd: N275,165,755,647.45; Benin Electricity Distribution Company: N82,114,660,624.99; Eko Electricity Distribution Company: N16,491,581,520.79 and Enugu Electricity Distribution Company: 39,114,906,819.66.

Others are: Ibadan Electricity Distribution Company: N103,412,814,294.67; Ikeja Electricity Distribution Company: N47,638,211,980.95; Jos Electricity Distribution Company: N104,377,248,037.96; Kaduna Electricity Distribution Company: N303,809,520,962.8; and.Kano Electricity Distribution Company: N96,621,626,259.92.

Also, Port Harcourt Electricity Distribution Company is indebted to the tune of N88,400,282,772.28; Yola Electricity Distribution Company (Old): N61,195,796,813.92; Yola Electricity Distribution Company (New): N-241,675,202.96 and Ajaokuta Electricity Distribution Company: N58,585,346,744.31.

At the moment, the total outstanding is N1,303,686,080,276.70.

The committee explained the investigation was aimed at verifying the Auditor-General’s claims, establishing the current debt position, and identifying the reasons for the persistent failure of DisCos to meet their payment obligations.

The committee confirmed that as of the end of 2024, the reconciled liability of the eleven DisCos stood at N1,000,929,477,013.50, covering both principal and interest, but rose to N1.3 trillion by September 2025 due to continued accruals.

Responding to the concerns, the Nigerian Electricity Regulatory Commission (NERC) issued a directive dated January 2026 that NBET should not charge interest on outstanding invoices between 2015 and 2020, it however mandated NBET to charge interest on outstanding invoices from 2021 onward.

The regulator also directed that any interest linked to delays involving MERISTEM be disregarded.

Consequently, NBET was instructed to recompute the DisCos’ liabilities, including the N128 billion interest accrued to Jos, Kano, and Ikeja.

Nevertheless, the Committee established that Jos and Kano Electricity Distribution Companies remained significantly indebted to NBET.

The interest component and accrued debt during government receivership period form a substantial part of Kano Disco’s liabilities.

The report recommended that NBET and NERC should allow Kano Electricity Distribution company (KEDCO), Jos Electricity Distribution Company and Ikeja Electricity Distribution company, with significant legacy obligations to restructure and repay their historical debts totaling N120,061,898,737 (including any obligation accrued during the early stabilisation period) over an extended period of not more than 10 years.

The report stressed the liabilities incurred during periods of government intervention or receivership by Kano Electricity Distribution company (KEDCO) totaling N13,399,000,000 should be reviewed and transferred to the Nigerian Electricity Liability Management Company (NELMCO) in line with precedents previously applied within the sector.

The report stated: “The market regulator, NERC should issue a directive to NBET to Waive all interest accrued in line with the terms of its letter dated January 2026 from 2015-September 2025 totaling 128,575,190,740.54 for Jos, Kano and Ikeja Disco representing the new market stabilization era focused on service-reflective tariffs, massive metering and structural reform.

“This is due to the fact that MERISTEM was introduced as a financial Intermediary to manage liquidity challenges in the sector including monthly invoice settlements through escrow account arrangements.

“Moreover, the current structure does not allow DisCos to charge commiserate interest on unpaid invoices to their customers including federal and state government ministries, departments and agencies.

“In addition, these DisCos do not have direct access to their sales collections as the current market settlement system (escrow account) is on a first line charge to first settle market obligations before operating expenses are released to the DisCos.

“All DisCos should ensure strict compliance with their current market obligations going forward to prevent further accumulation of liabilities,” it added.