NERC Tightens DisCos’ Revenue Use, Mandates Network Investment

The Nigerian Electricity Regulatory Commission (NERC) has issued a revised order directing electricity Distribution Companies (DisCos) to allocate part of their earned Non-Administrative Operating Expenditure (Non-Admin OpEx) to critical network improvement projects.

The order, which takes effect from September 4, 2026, is aimed at accelerating network upgrades, improving electricity service reliability and ensuring that available revenues are invested in critical infrastructure.

NERC said the directive followed a regulatory review of DisCos’ revenue utilisation during the 2025 market cycle.

Under the revised order, DisCos are required to establish and maintain dedicated Capital Expenditure (CapEx) Provision Accounts to fund approved network rehabilitation, reinforcement and expansion projects.

The amount to be allocated from earned Non-Admin OpEx will be determined partly by each DisCo’s debt profile.

Debt-free DisCos are required to remit 50% of their earned Non-Admin OpEx to their CapEx Provision Accounts from August 2026, with the allocation increasing to 60% from February 2027.

NERC also directed that all projects funded through the CapEx Provision Accounts must receive prior approval from the Commission and be reported on a quarterly basis.

Meanwhile, DisCos indebted to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator are required to complete debt reconciliation and submit Commission-approved repayment plans within 180 days.

According to NERC, the revised order is intended to strengthen electricity distribution infrastructure, improve service delivery and promote greater financial discipline across the sector.