Electricity distribution companies (DisCos) in Nigeria are facing fresh financial pressure following a directive by the Nigerian Electricity Regulatory Commission (NERC) ordering them to refund N20.33 billion to customers who purchased prepaid meters under the Meter Asset Provider (MAP) scheme.
The directive, contained in an amended order issued by the regulator on March 1, 2026, requires the power distribution companies to reimburse affected customers within 12 months.
According to the order, the refunds will be credited directly to customers’ electricity bills in equal instalments throughout the repayment period.
Industry stakeholders say the directive comes at a time when many distribution companies are already grappling with severe liquidity challenges across the Nigerian Electricity Supply Industry.
A senior manager at the Abuja Electricity Distribution Company (AEDC) said the directive could further strain the financial capacity of operators.
“These challenges have significantly constrained the cash flow available to distribution companies for infrastructure maintenance, network expansion, and metering investments,” the official said.
Power sector analyst Ayodele Oni said although the directive supports consumer protection, it could worsen the financial difficulties faced by many DisCos.
“While the directive is understandable from a consumer protection perspective, the reality is that most DisCos are already financially distressed,” Oni said.
“If we do not address the underlying tariff gaps and revenue recovery challenges, policies like this could worsen liquidity problems and affect the ability of operators to invest in network improvements.”
Energy economist Dr Benjamin Emmanuel, in an interview with journalists, warned that the scale of the refund requirement could create additional pressure on companies.
“Requiring DisCos to refund such a large amount within a short period without improving sector liquidity could put additional pressure on already weak balance sheets,” he said.
Similarly, power-sector consultant Adedayo Ademiluyi said the directive underscores the longstanding financial fragility of Nigeria’s electricity distribution sector.
“DisCos are operating in an environment where tariffs are not fully cost-reflective, and revenue collection remains weak. Introducing additional financial obligations without addressing these structural challenges could make compliance difficult for some operators,” he noted.
Nigeria introduced the Meter Asset Provider (MAP) scheme to address the country’s longstanding metering gap and reduce disputes arising from estimated billing.
Under the programme, third-party investors supply prepaid meters to electricity consumers, who pay upfront for the meters and later recover the cost through reimbursements from distribution companies.
However, implementation challenges, funding constraints and operational delays have slowed the pace of meter installations, while complaints over delayed refunds have persisted among customers.
Experts say the refund directive also reflects broader structural problems within Nigeria’s electricity market, including tariff gaps, weak revenue collection and electricity theft.
Distribution companies also face mounting losses due to ageing infrastructure, unpaid electricity bills from some government institutions and high operational costs, factors that continue to strain the financial stability of the power sector.
Under the amended order, NERC directed that all refunds must be completed within 12 months, with reimbursements credited directly to customers’ electricity bills in equal instalments during the period.
Industry observers say the ability of distribution companies to comply with the directive will depend largely on their financial capacity and operational performance.
The refund obligation under the order is estimated at N20.33 billion.
In October 2025, the Federal Government approved the disbursement of N28 billion to electricity distribution companies under the Meter Acquisition Fund (MAF) Tranche B scheme for the procurement and installation of prepaid meters across the country.
NERC orders DisCos to refund N20.33bn to prepaid meter customers
