Uche Cecil Izuora
The House of Representatives Public Accounts Committee has offered financial relief measures and a 10-year debt restructuring plan for Ikeja Electric, Kano and Jos Electricity Distribution Companies (DisCos).
The approval is part of efforts to stabilise Nigeria’s struggling power sector.
The committee endorsed the package for the three DisCos covering a combined liability of about N248.6 billion.
Chairman of the subcommittee, Mark Obetta, said the decision followed the adoption of a technical subcommittee report reviewing findings from the 2021 Auditor-General for the Federation’s report on the rising indebtedness of electricity distribution firms.
According to him, the recommendation is part of broader legislative efforts to address legacy debts and improve financial sustainability in the electricity market.
The report found that the total debt owed by 11 distribution companies rose from about 1 trillion naira at the end of 2024 to 1.3 trillion naira by September 2025, driven by accumulating principal and interest.
The committee said its investigation sought to verify the Auditor-General’s claims, determine the current debt position and identify reasons for persistent payment defaults by the companies.
A key issue during hearings was a dispute over interest charges, with the affected companies arguing that existing market rules did not clearly permit such charges on unpaid invoices.
In response, the Nigerian Electricity Regulatory Commission directed the Nigeria Bulk Electricity Trading Company not to apply interest on outstanding invoices from 2015 to 2020, but allowed interest charges from 2021 onward.
The regulator also instructed that interest linked to delays involving financial intermediary Meristem be disregarded, and ordered a recomputation of liabilities, including disputed interest.
Under the approved framework, the three companies will restructure and repay their historical debts over a period of up to 10 years.
The committee also recommended transferring about 13.4 billion naira in liabilities incurred during government intervention in Kano Electricity Distribution Company to the Nigerian Electricity Liability Management Company, in line with past sector practices.
It further called for a waiver of accrued interest for the three firms between 2015 and September 2025, citing structural constraints in the electricity market.
Committee Chairman Rep. Bamidele Salam urged strict compliance with market obligations to prevent further debt accumulation, warning that the long-term viability of the sector could be at risk without urgent reforms