DisCos face liquidity pressure as NERC orders N20.33bn meter refunds

Electricity distribution companies in Nigeria are facing renewed financial pressure following a directive by the Nigerian Electricity Regulatory Commission (NERC) requiring them to refund N20.33 billion to customers who purchased prepaid meters under the Meter Asset Provider (MAP) scheme.

The directive was contained in an amended order issued by the regulator on March 1, 2026, directing electricity distribution companies (DisCos) to reimburse affected customers within 12 months.

Under the order, the refunds will be credited to customers’ electricity bills in equal instalments over the repayment period, a move aimed at strengthening consumer protection and restoring confidence in Nigeria’s electricity market.

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What they are saying

Industry stakeholders say the directive comes at a time when electricity distribution companies are already struggling with severe liquidity challenges across the Nigerian Electricity Supply Industry.

Executives within several DisCos warn that the order could further strain their already fragile financial positions.

• “These challenges have significantly constrained the cash flow available to distribution companies for infrastructure maintenance, network expansion, and metering investments,” a senior manager at Abuja Electricity Distribution Company (AEDC) told Nairametrics.
• “While the directive is understandable from a consumer protection perspective, the reality is that most DisCos are already financially distressed,” said power sector analyst Ayodele Oni.
• “If we do not address the underlying tariff gaps and revenue recovery challenges, policies like this could worsen liquidity problems and affect the ability of operators to invest in network improvements,” he added.
• “Requiring DisCos to refund such a large amount within a short period without improving sector liquidity could put additional pressure on already weak balance sheets,” energy economist Dr. Benjamin Emmanuel said.

Similarly, power sector consultant Adedayo Ademiluyi said the directive shows the long-standing financial fragility of Nigeria’s electricity distribution segment.

• “DisCos are operating in an environment where tariffs are not fully cost-reflective, and revenue collection remains weak. Introducing additional financial obligations without addressing these structural challenges could make compliance difficult for some operators,” he said.

Energy policy analyst Ibrahim Maryam added that the refund order should be accompanied by broader reforms aimed at improving sector liquidity and reducing operational losses.

• “Consumer protection is important, but regulators must also ensure that the distribution companies remain financially viable. Without financially stable DisCos, the entire electricity value chain will struggle to function efficiently,” she noted.

Experts say the directive highlights the delicate balance regulators must maintain between protecting electricity consumers and ensuring the financial sustainability of power sector operators.

Get up to speed

Nigeria introduced the Meter Asset Provider (MAP) scheme to address the country’s longstanding metering gap and reduce disputes associated with estimated billing.

• Under the policy, third-party investors are allowed to supply prepaid meters to electricity consumers, with customers paying upfront for the meters and recovering the cost through reimbursements from distribution companies.
• The scheme was designed to accelerate meter deployment and reduce estimated billing across the electricity distribution network.
• However, implementation challenges, funding constraints, and operational delays have slowed progress in closing Nigeria’s metering gap.

Customer complaints over delayed meter refunds and slow meter installations have persisted since the programme was introduced.

These challenges have continued to generate tension between electricity consumers and distribution companies while highlighting broader structural weaknesses in the country’s power sector.

More insights

Energy analysts say the refund directive also reflects deeper structural issues within Nigeria’s electricity market, particularly around tariffs and revenue collection.

Despite several tariff reviews, electricity prices in some segments of the market are still considered insufficient to fully cover the cost of power supply.

Distribution companies continue to face significant revenue losses due to electricity theft and weak billing and collection systems.

• “Many government institutions and large electricity users still owe substantial unpaid electricity bills across several distribution networks,” another AEDC official said.

Persistent energy losses across aging distribution infrastructure further reduce the revenue available to operators.

High operational costs have also limited the ability of many DisCos to invest in network upgrades and metering infrastructure.

Experts say these issues have combined to create a liquidity crisis across the electricity value chain, affecting generation, transmission, and distribution companies.

**What you should know **

The Nigerian Electricity Regulatory Commission has directed that all refunds under the amended order must be completed within 12 months, with reimbursements applied directly to customer electricity bills.

• Industry experts say compliance with the directive will depend largely on the financial capacity and operational performance of individual distribution companies.
• The total refund obligation under the order is estimated at N20.33 billion.
• Refunds will be credited to customer electricity bills in equal instalments over the 12-month repayment period.
• The directive applies to customers who purchased prepaid meters under the Meter Asset Provider scheme.

Distribution companies are expected to comply fully with the reimbursement timeline set by the regulator.

In October 2025, the Federal Government approved the disbursement of N28 billion to electricity distribution companies under the Meter Acquisition Fund (MAF) Tranche B scheme for the procurement and installation of prepaid meters.

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