DisCos Generate N431.16 Billion in Q2 2024, but Remittance Performance Declines

Nigerian Electricity Distribution Companies (DisCos) generated N431.16 billion in revenues from customers during Q2 2024, reflecting a collection efficiency of 79.31%.

This information is detailed in the quarterly report of the Nigerian Electricity Regulatory Commission (NERC) for the second quarter of 2024.

The revenue was based on a total billing of N543.64 billion, marking a slight improvement of 0.20 percentage points from the previous quarter’s efficiency rate of 79.11%.

The increase in collection efficiency shows progress in the DisCos’ ability to recover billed amounts, despite ongoing difficulties within the power sector.

DisCos’ Payments to Upstream Market Operators

The report also highlights adjustments in the remittances made by DisCos to upstream market operators.

The total upstream invoice payable by DisCos in Q2 2024 amounted to N399.53 billion, which included N343.76 billion for generation costs, adjusted for Dispatch and Realisation Order (DRO) by the Nigerian Bulk Electricity Trading (NBET), and N55.77 billion for services provided by the Market Operator (MO).

Of this, the DisCos remitted N318.65 billion (N271.87 billion to NBET and N46.78 billion to the MO), leaving an unpaid balance of N80.88 billion.

The report shows that this remittance represents a performance rate of 79.76% in Q2 2024, down from the 96.93% achieved in Q1 2024.

Moreover, the remittance performance from special and bilateral customers also faced similar difficulties.

The four international bilateral customers serviced by the Nigerian Electricity Supply Industry (NESI) paid a total of $9.81 million, compared to an invoiced amount of $15.60 million for services received in Q2 2024.

Domestically, bilateral customers contributed N1.2 billion, out of a total invoiced amount of N1.9 billion.

Despite various government interventions, Nigeria’s power sector continues to face substantial issues, mainly due to insufficient investment and ongoing liquidity problems.

In May, the federal government began the process of paying N130 billion to address the N1.3 trillion debt owed to gas suppliers within the Nigerian Electricity Supply Industry (NESI). To date, around N205 billion has been disbursed to gas suppliers to improve electricity generation across the country.

This debt repayment initiative is part of a broader government strategy aimed at enhancing liquidity in the sector and ultimately increasing the national power supply.

The persistent challenges in achieving optimal collection rates, handling remittances, and reducing financial losses point to deeper issues within Nigeria’s power distribution industry.