DisCos demand action over MDAs’ electricity debts

Nigeria’s electricity distribution companies are facing additional financial pressure as government Ministries, Departments and Agencies continue to delay payment of their electricity bills, the Association of Nigerian Electricity Distributors has said.

ANED Managing Director and Chief Executive Officer, Sunday Oduntan, disclosed this in Abuja on Wednesday in an interview with the News Agency of Nigeria.

Oduntan urged the Federal Government to make electricity debts owed by its agencies a first-line charge on approved budgets to ensure that bills are settled promptly.

He also called for government institutions that fail to pay for electricity to be subjected to the same enforcement measures available to DisCos against other customers.

“DisCos need to be empowered to disconnect government agencies that fail to settle their electricity bills and pursue lawful recovery of outstanding debts,” he said.

According to him, resolving the payment challenge is necessary to ease the financial burden on DisCos and strengthen their capacity to maintain and expand electricity distribution infrastructure.

Oduntan also advocated access to affordable long-term financing to enable DisCos modernise their networks and improve service delivery.

He called for better customer service, transparent billing systems and increased deployment of mini-grids and off-grid electricity solutions, particularly in rural and underserved areas.

The ANED chief further stressed the need for stronger accountability in the distribution sector, saying consumers and civil society organisations should have effective mechanisms to demand improved service from DisCos.

He identified improved metering, stronger revenue collection, affordable financing and greater accountability as key measures for restoring the financial sustainability of the electricity distribution business and improving power supply across the country.

The concerns come amid a broader liquidity crisis in Nigeria’s electricity market. Debts owed to power generation companies are reportedly around N7tn, while gas suppliers have rejected a Federal Government proposal for a 50 per cent debt write-off.

The Federal Government had previously approved a N3.3tn settlement plan to address legacy debts accumulated in the Nigerian Electricity Supply Industry between 2015 and early 2025.

Under the arrangement, obligations to GenCos were to be settled through 10-year promissory notes and proceeds from a N501.02bn bond issued by the Nigerian Bulk Electricity Trading Plc.

The bond forms part of the government’s initial efforts to address market shortfalls that have restricted investment and placed further pressure on the financial stability of Nigeria’s power sector.