By Stella Odueme
The Nigerian Electricity Regulatory Commission (NERC) has directed electricity distribution companies (DisCos) to allocate 50 per cent of their earned non-administrative operating expenditure (Non-Admin OpEx) to capital expenditure (Capex) for network improvement.
The directive is contained in a revised order on the utilisation of earned Non-Admin OpEx by successor DisCos, signed by the NERC Chairman, Musiliu Oseni, and Vice-Chairman, Yusuf Ali.
The order, released on Wednesday, September 9, is aimed at accelerating investment in electricity distribution infrastructure, improving service reliability and ensuring that available revenues are deployed to critical network projects.
Under the revised framework, debt-free DisCos are required to remit 50 per cent of their earned Non-Admin OpEx into dedicated Capex provision accounts from August, with the allocation rising to 60 per cent from February 2027.
Non-Admin OpEx refers to the portion of a DisCo’s operating revenue available outside basic administrative expenses and subject to regulatory reinvestment requirements.
NERC explained that the Capex provision accounts would be used to finance approved network rehabilitation, reinforcement and expansion projects.
The commission said the amount to be committed by each DisCo would be influenced, among other factors, by its debt profile.
It further directed that projects financed through the Capex accounts must obtain regulatory approval and be reported to the commission on a quarterly basis.
The revised order also imposes additional obligations on DisCos with outstanding debts to the Nigerian Bulk Electricity Trading Company (NBET) and the Market Operator.
According to NERC, the affected companies are required to complete debt reconciliation and submit commission-approved repayment plans within 180 days.
The commission said the measures followed a regulatory review of the DisCos’ revenue utilisation during the 2025 market cycle.
NERC added that the revised order, which took effect from September 4, was designed to strengthen distribution infrastructure, improve electricity service delivery and promote greater financial discipline across the power sector.