First half of the article

•5.11 TWh unbilled, N637.5 billion uncollected

IN Parts I and II, we followed Nigeria’s grid electricity from installed capacity to available capacity and actual generation, using Nigerian Electricity Regulatory Commission (NERC) data from April 2025 to March 2026. Of 13,625 megawatts (MW) installed, only about 5,174 MW was available on average and about 4,312 MW was generated. Part III now examines the electricity that reached the eleven Distribution Companies (DisCos): how much was accounted for and billed, how much of the bills became cash, and why some DisCos perform much better than others.

Electricity received, billed and cash implications

During the 12 months, the DisCos received about 30.31 terawatt-hours (TWh) of electricity at their trading points but billed customers for only about 25.20 TWh. About 5.11 TWh—more than five billion kilowatt-hours, or “units” as consumers commonly call them—did not become billed energy. In other words, for every 100 units received by the DisCos, about 83 units were billed to customers and roughly 17 were not. The unbilled electricity reflects a combination of physical losses through distribution lines and transformers and commercial losses arising from inaccurate metering, unmetered consumption, meter bypass, erroneous billing, poor customer enumeration and electricity theft. Across the four quarterly reports, NERC’s reported values for electricity supplied to the DisCos sum to about ₦3.69 trillion. Dividing that value by the 30.31 TWh received gives an implied weighted-average value of about ₦121.68/kWh. This is not a wholesale tariff or an NBET invoice rate, but an analytical average derived from NERC’s reported energy and monetary values.

Customer bills totalled about ₦3.00 trillion for 25.20 TWh of billed energy, implying an average billed rate of about ₦119.07/kWh. Because customers pay different tariffs according to service band and customer category, this is also a weighted system-wide average rather than a uniform retail tariff. Roughly ₦688 billion of potential billing value therefore did not become customer bills. Of the approximately ₦3.00 trillion actually billed, only about ₦2.36 trillion was collected, leaving roughly ₦637.5 billion uncollected. The DisCos therefore converted about 81.4 per cent of the value of electricity supplied into customer bills and collected about 78.8 per cent of those bills. Put together, only about 64 per cent of the original value of electricity supplied became collected revenue. Put simply, for every ₦100 worth of electricity supplied to the DisCos, only about ₦81 became customer bills. Roughly ₦17 of the original ₦100 was billed but not collected, leaving only about ₦64 in cash.

These two stages are combined in a common distribution measure called Aggregate Technical, Commercial and Collection (ATC&C) loss: ATC&C loss = 1 − (Billing Efficiency × Collection Efficiency). Using the 12-month figures, Nigeria’s eleven DisCos recorded an aggregate ATC&C loss of about 35.9 per cent.

How does Nigeria compare?

India provides a useful international benchmark, although the methodologies are not perfectly identical. In FY2024/25, India recorded a national AT&C loss of 15.04 per cent, with billing efficiency of 87.59 per cent and collection efficiency of 97 per cent. The larger difference is in collections: about 79 per cent in Nigeria against 97 per cent in India. Ghana’s two principal distribution utilities report ATC&C losses of about 25 per cent. In Pakistan, K-Electric’s FY2024/25 T&D-loss and revenue-recovery figures imply an AT&C loss of about 22.8 per cent. Reporting systems differ, but all three benchmarks are substantially better than Nigeria’s 35.9 per cent. Nigeria’s distribution losses are therefore not an unavoidable feature of supplying electricity in a developing economy.

DisCos performance classification

The aggregate figure conceals enormous differences among the eleven DisCos. I calculated a day-weighted twelve-month average of each DisCo’s quarterly ATC&C losses and classified them as Strong at 25 per cent or lower; Moderate at above 25 per cent up to 40 per cent; Poor at above 40 per cent up to 55 per cent; and Critical above 55 per cent. These are my analytical classifications, not NERC ratings.

Only two DisCos were Strong: Eko at 15.4 per cent and Ikeja at 18.2 per cent. Three were Moderate: Abuja at 32.1 per cent, Port Harcourt at 36.3% and Enugu at 39.8 per cent. Three were Poor: Benin at 43.1 per cent, Kano at 43.8 per cent and Ibadan at 44.2 per cent. And three were Critical: Yola at 58.0 per cent, Jos at 61.1 per cent and Kaduna at 70.3 per cent.

Six of the eleven DisCos therefore lost more than 40% of the potential revenue represented by electricity supplied to them. Kaduna’s roughly 70% ATC&C…

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