The Nigerian Electricity Regulatory Commission, NERC, has issued a revised order directing electricity Distribution Companies, DisCos, to dedicate a portion of their earned operating revenue to critical network improvement projects.
The Commission said the directive was aimed at accelerating network upgrades, improving electricity supply reliability and ensuring that available revenues were invested in critical infrastructure.
NERC announced the revised Order on the utilisation of earned Non-Administrative Operating Expenditure, Non-Admin OpEx, by successor DisCos in a statement issued on Wednesday.
The Order, which took effect from September 4, 2026, followed a regulatory review of the DisCos’ revenue utilisation during the 2025 market cycle.
Under the new directive, all DisCos are required to establish and maintain dedicated Capital Expenditure, CapEx, Provision Accounts to fund approved network improvement projects.
NERC said a portion of the earned Non-Admin OpEx would be earmarked for network rehabilitation, reinforcement and expansion, with the amount determined by the debt profile of each distribution company.
The Commission specifically directed debt-free DisCos to remit 50 per cent of their earned Non-Admin OpEx into their CapEx Provision Accounts from August 2026.
The contribution will increase to 60 per cent from February 2027.
NERC further stated that all projects to be funded through the CapEx Provision Accounts must receive the Commission’s approval and be reported on a quarterly basis.
The regulator also directed DisCos indebted to the Nigerian Bulk Electricity Trading Plc, NBET, and the Market Operator to complete their debt reconciliation processes and submit Commission-approved repayment plans within 180 days.
According to NERC, the revised Order is designed to strengthen electricity distribution infrastructure, improve service delivery and promote greater financial discipline in the power sector.
The Commission expressed optimism that the policy would ensure that revenues generated by electricity distribution companies were channelled towards addressing critical infrastructure gaps and improving the quality of electricity supply to consumers across the country.
Electricity: NERC clamps down on DisCos, orders revenue diversion to network upgrades