The House of Representatives Public Accounts Committee has approved a N248.64bn financial relief and a 10-year debt restructuring arrangement for Kano, Jos and Ikeja Electricity Distribution Companies as part of efforts to stabilise the power sector.
The package comprises N128.57bn in accrued interest on debts between 2015 and September 2025, alongside N120.06bn in legacy liabilities.
The decision followed the adoption of a report by a technical subcommittee that reviewed issues raised in the 2021 Auditor-General for the Federation’s report on the rising indebtedness of distribution companies, based on submissions from the Nigeria Bulk Electricity Trading Company.
Presenting the report, Chairman of the subcommittee, Mark Chidi Obetta, said the recommendations were aimed at addressing longstanding debt challenges and improving the financial health of the electricity market.
Findings showed that the combined debt of 11 DisCos rose from about N1tn in December 2024 to N1.3tn as of September 2025, driven by increasing principal and interest obligations.
The committee also noted that reconciled liabilities stood at N1tn at the end of 2024 but rose significantly within nine months due to continued accruals.
A key issue during deliberations was the charging of interest on outstanding invoices, which the affected DisCos argued was not clearly provided for under existing market rules.
In response, the Nigerian Electricity Regulatory Commission, in a directive issued in January 2026, instructed the Nigeria Bulk Electricity Trading Company not to apply interest on invoices issued between 2015 and 2020, but allowed such charges from 2021.
The regulator also directed that any interest linked to delays involving MERISTEM be excluded.
Following the directive, NBET was mandated to recalculate the liabilities of the affected firms, including the disputed interest component.
As part of its resolutions, the committee approved the restructuring of N120.06bn in legacy debts to be repaid over a period of up to 10 years.
It also recommended that N13.39bn in liabilities incurred by Kano Disco during government intervention be transferred to the Nigerian Electricity Liability Management Company.
In addition, the lawmakers directed the waiver of all interest accrued between 2015 and September 2025 for the three DisCos, citing ongoing reforms such as metering expansion and tariff adjustments aimed at improving sector liquidity.
The report warned that prevailing market arrangements limit the ability of DisCos to charge interest on unpaid bills, especially those owed by government agencies, as revenues are managed through escrow systems prioritising market obligations.
Chairman of the committee, Bamidele Salam, urged distribution companies to adhere strictly to market rules to prevent further debt accumulation, warning that the sector’s sustainability depends on improved compliance and regulatory enforcement.
