Electricity distribution companies in Nigeria are facing fresh financial pressure after the Nigerian Electricity Regulatory Commission (NERC) ordered them to refund N20.33 billion to customers who paid for prepaid meters under the Meter Asset Provider Scheme.
The directive, contained in an amended order issued on March 1, 2026, requires distribution companies (DisCos) to complete the refunds within 12 months. According to the regulator, the repayments will be made through credits applied to customers’ electricity bills in equal instalments during the repayment period.
The move is aimed at strengthening consumer protection and improving confidence in Nigeria’s electricity market. However, industry stakeholders warn that the order could worsen existing liquidity challenges in the Nigerian Electricity Supply Industry.
A senior official at the Abuja Electricity Distribution Company (AEDC) said the directive could further strain the finances of operators already facing major revenue challenges. “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 noted that while the decision supports consumer rights, it may increase financial stress across the distribution segment. “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,” he said.
Energy economist Benjamin Emmanuel expressed similar concerns, warning that enforcing large refunds within a limited period could put additional pressure on the already weak balance sheets of distribution companies. Power sector consultant Adedayo Ademiluyi also pointed to deeper structural issues affecting the 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 said.
Energy policy analyst Ibrahim Maryam added that consumer protection efforts should be accompanied by broader reforms aimed at improving liquidity across the power sector.
“Consumer protection is important, but regulators must also ensure that the distribution companies remain financially viable. Without financially stable DisCos, the entire electricity value chain will struggle to function efficiently,” she noted.
The Meter Asset Provider scheme was introduced to reduce Nigeria’s longstanding metering gap and address disputes related to estimated billing. Under the policy, third-party investors supply prepaid meters to consumers, who pay upfront and are later reimbursed by distribution companies.
While the programme was designed to accelerate meter installations across the country, progress has been slowed by funding constraints, operational delays, and persistent customer complaints over delayed refunds and meter deployment.
Analysts say these challenges highlight broader structural weaknesses in Nigeria’s power sector, including tariff shortfalls, electricity theft, aging infrastructure, and poor revenue collection.
In October 2025, the Federal Government of Nigeria approved N28 billion for electricity distribution companies under the Meter Acquisition Fund Tranche B programme to support the procurement and installation of additional prepaid meters.
