The Nigerian Electricity Regulatory Commission (NERC) estimated that the federal government incurred an N628.6 billion subsidy debt in 2023.
This is mentioned in the NERC 2023 report, published on May 22.
According to the report, the government spent N252.76 billion in the fourth quarter (Q4), up N48.17 billion or 28.54 per cent from N204.59 billion in the third quarter of 2023.
According to NERC, the increase in subsidies was largely due to the government’s objective of harmonising exchange rates while simultaneously requiring that end-user customer tariffs remain at the authorised rates through December 2022.
In Q1 of last year, the government spent N36.02 billion, followed by N135.23 billion in Q2.
The subsidy solely applies to the power generation costs paid by distribution companies (DisCos) to the sector’s electricity trader, Nigerian Bulk Electricity Trading (NIBET) Plc.
In terms of revenue, NERC reported that DisCos earned N1.07 trillion over the reviewed period.
NERC said:
“The total revenue collected by all Discos in 2023/Q4 was ₦294.95bn out of ₦399.69 billion billed to customers.”
“This translates to a collection efficiency of 73.79 percent which represents a decrease of -2.77 basic points when compared to 2023/Q3 (76.56 percent).”
NERC reported that the available generation capacity for the quarter was 4,922.26 megawatts (MW).
According to the commission, this is a 16.88 percent increase, or 710.82MW, over the 4,211.44MW recorded in Q3.
“The total electricity generated in the quarter also increased by 12.98% (+1,125.05GWh) from 8,664.82GWh in 2023/Q3 to 9,789.87GWh. The increase in gross energy generation during the quarter was primarily due to the increase in the available generation capacity of the grid-connected power plants compared to 2023/Q3.”
“The significant increase in the total amount of energy generated in October compared to energy generated in September can be attributed to the increase in energy generation from Rivers IPP (+122.20%), Sapele GT NIPP (+82.82%), Afam VI (+71.01%), Shiroro (+42.97%), and Jebba (+35.40%) power plants.”