The House of Representatives Public Accounts Committee has approved a financial relief package totaling N248.64bn for three electricity distribution companies, Kano, Jos, and Ikeja. This package includes N128.60bn in accrued interest on debts from 2015 to 2025 and N120.06bn in historical principal obligations. The committee's decision aims to ease the mounting liabilities of these companies and stabilize Nigeria's fragile power market.
The committee's findings show that the combined indebtedness of 11 distribution companies rose from N1tn as of December 31, 2024, to N1.3tn by September 25, 2025. The breakdown of liabilities indicates that each distribution company owes significant amounts, with Abuja Electricity Distribution Company owing the most at N275.17bn. The committee's report recommends that the three distribution companies be allowed to restructure and repay their historical debts over a period not exceeding 10 years.
The Nigerian Electricity Regulatory Commission had issued a directive in January 2026 stopping the Nigerian Bulk Electricity Trading Company from charging interest on unpaid invoices between 2015 and 2020. The committee's report also recommends that liabilities incurred during periods of government intervention be transferred to the Nigerian Electricity Liability Management Company. The report emphasizes the need for strict compliance with market obligations to prevent further accumulation of liabilities.
The committee's chairman, Bamidele Salam, warned that without restructuring and regulatory discipline, the power distribution segment could remain financially unstable. The distribution companies have consistently fallen short in remitting full payments due to factors such as high technical and commercial losses, poor metering, and weak revenue collection.
Mark Obetta, the Chairman of the subcommittee, has taken a crucial step in addressing the legacy debts of electricity distribution companies, with the approval of a 10-year debt restructuring plan for Kano, Jos, and Ikeja DisCos. This move is significant, given the substantial liabilities of these companies, with Kano DisCo owing N96.62bn, Jos DisCo owing N104.38bn, and Ikeja DisCo owing N47.64bn. The recommendation to waive interest accrued on unpaid invoices between 2015 and 2025, totaling N128.58bn, is a notable aspect of the report.
The context of this story is rooted in the broader efforts to address the financial instability of the power distribution segment. The committee's findings highlight the sharp increase in indebtedness of the distribution companies, driven largely by accumulated interest and persistent payment defaults. The report's emphasis on strict compliance with market obligations is crucial, given the factors contributing to the financial instability, such as high technical and commercial losses, poor metering, and weak revenue collection.
The implication of this story is that ordinary Nigerians, who are already struggling with poor power supply, may face further challenges if the distribution companies are unable to restructure and repay their debts. The report's recommendation to transfer liabilities incurred during periods of government intervention to the Nigerian Electricity Liability Management Company may provide some relief, but the underlying issues of poor metering, tariff shortfalls, and weak revenue collection need to be addressed to prevent further accumulation of liabilities.
The wider pattern of this story fits into the larger trend of financial instability in the Nigerian power sector. The committee's warning that without restructuring and regulatory discipline, the power distribution segment could remain financially unstable, highlights the need for urgent action to address the underlying issues. The approval of the debt restructuring plan is a step in the right direction, but it is crucial that the distribution companies and regulatory bodies work together to ensure strict compliance with market obligations and prevent further accumulation of liabilities.
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