From Victor Osula, Abuja
Nigeria’s electricity market is facing deepening financial strain as the Nigerian Bulk Electricity Trading Plc (NBET) has revealed that only ₦60 million was released from the ₦858 billion appropriated in its 2025 capital budget to address electricity tariff shortfalls.
The disclosure was made by NBET’s Acting Managing Director, Johnson Akinnawo, during the agency’s 2025 budget performance review and defence of its 2026 budget proposal before the Senate Committee on Finance.
NBET was established as a stabilising institution in Nigeria’s power sector, responsible for purchasing electricity from generation companies (GenCos) and selling to distribution companies (DisCos), while guaranteeing payments to power producers to ensure liquidity across the value chain.
However, Akinnawo told lawmakers that persistent underfunding, largely driven by non-cost-reflective electricity tariffs, has continued to undermine the agency’s ability to meet its obligations.
“At the close of the year, only ₦60 million was released. Unfortunately, because of that, our budget performance was affected”, he said.
He explained that electricity tariffs remain significantly below the actual cost of generation, transmission and distribution, resulting in a recurring funding gap within the market.
“Every GenCo gets paid an equal percentage from whatever collections come from the DisCos. The Federal Government, through the Ministry of Finance, covers the funding gap arising from partial risk guarantees to make up the difference”, Akinnawo noted.
According to him, delays and shortfalls in releases by the Ministry of Finance have repeatedly constrained NBET’s operations, worsening liquidity challenges in the sector.
He further disclosed that the ₦60 million eventually released could not be utilised due to procurement process constraints, compounding the agency’s funding difficulties.
“The gap between generation costs and allowed tariffs is substantial, and without government intervention, the electricity market cannot remain stable”, Akinnawo warned.
Members of the Senate Committee on Finance expressed concern over the widening financial pressure in the power sector, cautioning that sustained underfunding could further threaten electricity supply nationwide and deepen the challenges facing households and businesses.
