By Gift Chapi Odekina, Abuja The House of Representatives Public Accounts Committee has approved a comprehensive financial relief package and a 10-year debt restructuring plan for the Kano, Jos, and Ikeja Electricity Distribution Companies (DisCos), in a move aimed at stabilising Nigeria’s power sector.
The resolution covers accrued interest of N128.57 billion on debts incurred between 2015 and September 2025, alongside historical liabilities of N120.06 billion, bringing the total obligation to N248.64 billion.
The decision followed the adoption of a report by a technical subcommittee, which reviewed findings from the 2021 Auditor-General for the Federation’s report on the rising indebtedness of electricity distribution companies, as highlighted by the Nigeria Bulk Electricity Trading Company (NBET).
Chairman of the subcommittee, Hon. Mark Chidi Obetta, said the recommendations were part of legislative efforts to address legacy debts and improve the financial viability of the electricity market.
According to the report, the combined debt profile of 11 DisCos rose from N1 trillion as of December 2024 to N1.3 trillion by September 2025, driven by accumulating principal and interest obligations.
The committee noted that as of the end of 2024, reconciled liabilities stood at N1.000 trillion but increased significantly within nine months due to continued accruals.
A major point of contention during the hearings was the imposition of interest on outstanding invoices, which the Jos, Ikeja, and Kano DisCos argued was not clearly supported by existing Market Rules.
In response, the Nigerian Electricity Regulatory Commission (NERC), in a January 2026 directive, instructed NBET not to charge interest on invoices issued between 2015 and 2020, but permitted interest charges from 2021 onward.
It also directed that any interest linked to delays involving MERISTEM be disregarded.
Following this directive, NBET was mandated to recalculate the liabilities of the affected DisCos, including the disputed N128 billion interest component.
The committee found that Jos and Kano DisCos remain heavily indebted, with a significant portion of Kano Disco’s liabilities tied to interest and debts accumulated during periods of government receivership.
As part of its recommendations, the committee approved a restructuring of N120.06 billion in legacy debts owed by the three DisCos, to be repaid over a period not exceeding 10 years.
It also advised that N13.39 billion in liabilities incurred by Kano Disco during government intervention be transferred to the Nigerian Electricity Liability Management Company (NELMCO), in line with existing sector precedents.
Additionally, the committee directed NERC to ensure the waiver of all interest accrued between 2015 and September 2025—amounting to N128.57 billion—for the three DisCos, citing ongoing market reforms, metering expansion, and tariff adjustments aimed at improving liquidity in the sector.
The report emphasised that current market structures limit DisCos’ ability to charge interest on unpaid bills, particularly from government agencies, while revenues are managed through escrow arrangements that prioritise market obligations.
It warned that without urgent reforms and strict regulatory enforcement, the financial sustainability of Nigeria’s electricity distribution sector could remain under threat.
Committee Chairman, Rep. Bamidele Salam, urged all DisCos to comply fully with market rules going forward to prevent further accumulation of debt.
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