Power Buyers Pay 95% Outside Nigeria’s Troubled Market

Nigeria’s electricity market is showing two very different payment patterns, with domestic bilateral customers settling 95 per cent of their first-quarter bills even as generation companies faced a 39 per cent payment shortfall in the conventional market in 2025.

The difference is shown in the Nigerian Electricity Regulatory Commission’s First Quarter 2026 Report, which recorded N5.82bn in payments from domestic bilateral customers against N6.12bn billed between January and March. Only about N306m was left unpaid at the end of the quarter.

The figures give a clearer picture of why direct electricity sales have become important to power generation companies. Under bilateral arrangements, eligible customers buy electricity through direct commercial agreements with generation companies instead of relying solely on the regular wholesale electricity market.

For an industry facing large unpaid bills, the payment pattern among bilateral buyers stands out.

Bilateral customers settle most bills

The NERC report showed that domestic bilateral customers paid N5,816.28m against N6,122.35m invoiced by the Market Operator for services provided in the first quarter.

The 95 per cent payment rate was up from 84.23 per cent in the fourth quarter of 2025.

The change came even as the amount billed rose sharply. Domestic bilateral invoices increased from N4.17bn in the fourth quarter of 2025 to N6.12bn in the first quarter of 2026.

That represented an increase of about 46.7 per cent.

Payments rose even faster, climbing from N3.51bn to N5.82bn. The increase in collections was 65.5 per cent within one quarter.

The unpaid amount also fell from about N658m in the fourth quarter to roughly N306m in the first quarter.

Several customers paid their bills in full. Mainstream/PRISM settled N2.234bn, compared with N1.883bn in the previous quarter. Mainstream/MBELT EKEDC also paid its N1.253bn bill in full.

Zungeru/Youngxing settled N917.89m in full. Mainstream/PHEDC, Mainstream/JEDC, Mabon/KEDCO, NDPHC/Orashi, Sapele/Phoenix and NDPHC/Sunflag also recorded complete payments.

The figures also show improvements among some customers that had recorded poor payment performance.

Taopex/KAM INT paid N140.12m from a N232.64m invoice, giving it a 60.23 per cent payment rate. It had made no payment against a N264.31m bill in the previous quarter.

Trans Amadi (FMPI) also went from zero payment in the fourth quarter to N6.76m in the first quarter. That represented 64.09 per cent of its invoice.

North South/Star P recorded another notable change, going from zero payment in the fourth quarter to full settlement of N36.53m against a N36.45m invoice.

The main market still carries unpaid bills

The bilateral figures stand out against the financial problems facing the conventional electricity market.

Generation companies have warned that payment shortages and unpaid government subsidy obligations have affected their finances. The market payment shortfall to GenCos stood at 39 per cent in 2025.

The Association of Power Generation Companies has also said outstanding debts owed to generation companies have reached N6tn.

The association has said the debts affect the ability of GenCos to maintain power plants, service loans, procure gas and invest in additional generation capacity.

Bilateral transactions provide a different route for electricity sales. Domestic customers can buy excess electricity generated by power plants that is not required in the regular electricity market.

The customers’ payments are remitted by generation companies to the Market Operator on their behalf.

The first-quarter figures show that this arrangement produced a 95 per cent payment rate among domestic bilateral customers.

That record was not universal, however.

Omotosho II/Pulkit paid N20.85m out of N28.93m billed, representing about 72 per cent. Alaoji/APLE made no payment against N122.88m billed.

Trans Amadi (OAU) also made no payment on N66.72m billed, while NDPHC/Weewood recorded zero payment against N12.24m.

The figures present a mixed picture within the bilateral market, but the overall payment rate was considerably higher than the payment performance recorded in the conventional market.