The Federal Government spent ₦1.928 trillion on electricity subsidies in 2025 as electricity tariffs remained below the cost of supplying power, according to the Nigerian Electricity Regulatory Commission (NERC).

The figure was disclosed in NERC’s 2025 Annual Report, which provides an overview of developments and financial activities within the Nigerian Electricity Supply Industry (NESI) during the year.

NERC explained that the subsidy represents the difference between the cost-reflective tariff and the amount electricity consumers were permitted to pay.

According to the commission, whenever the approved end-user tariff falls below the cost-reflective rate, the Federal Government is responsible for funding the resulting gap.

NERC put the Federal Government’s gross subsidy obligation for 2025 at ₦1.928 trillion.

The regulatory commission also reported that electricity distribution companies (DisCos) received a combined invoice of ₦1.722 trillion from the Nigerian Bulk Electricity Trading Company (NBET) and the Market Operator for energy costs and administrative services during the year.

Of the amount invoiced, the DisCos remitted approximately ₦1.632 trillion, representing an overall remittance performance of 94.80 per cent.

NERC said the outstanding ₦89.58 billion constituted a market shortfall attributable to participants in the electricity market.

Among the distribution companies, Eko, Ikeja and Port Harcourt DisCos recorded 100 per cent remittance performance to NBET in 2025. Kaduna DisCo recorded the lowest performance, with 40.13 per cent.

For payments to the Market Operator, Abuja, Benin, Eko, Enugu, Ikeja, Port Harcourt and Yola DisCos achieved 100 per cent remittance performance. Kaduna again recorded the lowest figure at 48.11 per cent.

Electricity Sales to Neighbouring Countries

NERC also disclosed that Nigeria continued supplying electricity to three international bilateral customers in 2025.

They are Société Béninoise d’Energie Electrique in Benin Republic, Compagnie Energie Electrique du Togo and Société Nigérienne d’Electricité in Niger Republic.

The three international customers were collectively issued invoices worth $73.91 million by the Market Operator and paid $62.75 million, representing an 84.90 per cent remittance performance.

Meanwhile, domestic bilateral customers received invoices totalling ₦13.204 billion and paid ₦12.755 billion, representing a remittance rate of 96.60 per cent.

Nigeria’s Power Generation Capacity

The NERC report also highlighted continued challenges with electricity generation capacity in the country.

It stated that the average available generation capacity from grid-connected power plants stood at 5,398.33 megawatts in 2025.

The availability factor for the plants was 39.62 per cent, meaning that more than 60 per cent of the installed generation capacity was unavailable during the period.

Total electricity generation during the year stood at 39,208.68 gigawatt-hours, translating to an average hourly generation of 4,475.88 megawatts.

Hydropower plants contributed 12,804.18GWh, accounting for 32.66 per cent of total electricity generated in Nigeria during 2025.

The figures highlight the financial burden of electricity subsidies on the Federal Government, alongside persistent challenges surrounding generation capacity, market remittances and the overall stability of Nigeria’s electricity supply industry.