Discos’ Revenue Jumps by over N600bn Despite Weak Operational Metrics

Emmanuel Addeh in Abuja

Electricity Distribution Companies (Discos) in Nigeria recorded up to N610 billion increase in revenue in 2025, despite persistent declines in key performance indicators across the power value chain, raising fresh concerns about the disconnect between consumer payments and service delivery.

An analysis of data from the Nigerian Electricity Regulatory Commission (NERC) showed that total revenue collected by the Discos rose significantly to about N2.31 trillion in 2025, up from N1.7 trillion in 2024 and N1 trillion in 2023. 

The figures indicated a steady upward trajectory in consumer spending on electricity, especially with the implementation of the ‘Band A’ policy, even as generation constraints, infrastructure limitations and service inefficiencies continue to weigh on the sector.

An analysis of the commercial performance of the Discos revealed that while they issued a total of N3.025 trillion in electricity bills in 2025, only N2.311 trillion was recovered, translating to a collection efficiency of 77.38 per cent. This left an outstanding N684.41 billion in uncollected revenue, underscoring lingering liquidity challenges within the Nigerian Electricity Supply Industry (NESI).

Quarterly breakdowns showed a gradual rise in collections over the year. In the first quarter, Discos collected N559.32 billion, which increased marginally by 2.5 per cent to N573.53 billion in the second quarter. 

Collections rose further to N581.33 billion in the third quarter before recording a more notable 6.8 per cent increase to N621.19 billion in the fourth quarter. Monthly data also indicated that collections peaked toward the end of the year, although December recorded a slight dip to N207.49 billion from N208.78 billion in November.

But the increase in revenue comes against a backdrop of declining operational performance, particularly in power generation and plant availability. NERC’s fourth quarter 2025 report showed that the average available generation capacity of grid-connected power plants dropped by 0.55 per cent, from 5,430.34 megawatts in the third quarter to 5,400.38 megawatts in the fourth quarter.

Out of the 28 plants connected to the national grid, 17 recorded declines in available capacity during the period. Notable reductions were observed in plants such as Ibom Power, Geregu, Omotosho, Ihovbor and Afam, reflecting ongoing technical and operational challenges. Alaoji power plant remained completely unavailable throughout the period, with zero capacity recorded across both quarters.

However, hydropower plants showed mixed performance. While Shiroro experienced a drop in available capacity due to maintenance-related shutdowns, other plants such as Kainji, Jebba and Zungeru recorded improvements, largely driven by seasonal increases in water levels during the rainy period. The seasonal inflows typically boost hydro generation between the third and fourth quarters of the year.

Besides, the overall Plant Availability Factor (PAF) , a critical measure of generation performance, remained weak. The average PAF stood at 39.64 per cent in the fourth quarter, indicating that over 60 per cent of installed generation capacity was unavailable for dispatch at any given time. This represented a slight decline from 39.86 per cent recorded in the previous quarter.

Only nine power plants achieved availability factors above 50 per cent, with Zungeru and Ikeja plants reaching full availability. At the lower end, Ibom Power recorded a PAF of just 2.16 per cent, further highlighting the uneven performance across generation assets. But generally, the average hourly generation rose by 6.55 per cent to 4,452.71 megawatt-hours per hour in the fourth quarter, up from 4,179.15MWh/h in the preceding quarter. Total generation also increased to 9,831.58 gigawatt-hours, representing a gain of 604.01GWh.

The growth in output was largely driven by hydropower plants, which recorded a combined increase of 25.85 per cent in average hourly generation. Kainji, Zungeru and Jebba were the key contributors to this improvement. In contrast, thermal plants saw a slight decline of 2.72 per cent, with several major plants, including Delta, Afam and Odukpani, recording reduced generation levels.

The divergence between rising revenues and weakening technical performance has intensified scrutiny of the sector, particularly regarding tariff structures and service delivery. 

For Nigerian power consumers, the implications are significant because while electricity spending has more than doubled within two years, complaints over erratic supply, estimated billing and infrastructure failures persist across many parts of the country.

Besides, the data reinforced the structural imbalance within Nigeria’s power sector, where gains in commercial performance are not necessarily matched by improvements in operational efficiency, given that there’s no corresponding investments in generation, transmission and distribution infrastructure.