ELECTRICITY distribution companies (disCos) in Nigeria are facing renewed liquidity concerns after the Nigerian Electricity Regulatory Commission (NERC) directed them to return N20.33 billion to customers who paid for prepaid meters under the Meter Asset Provider (MAP) scheme.
The instruction was issued in an amended regulatory order dated March 1, 2026, which requires all electricity distribution companies to refund affected consumers within a 12-month period.
According to the directive, the repayment will not be made as lump sums. Instead, the refunds will be credited to customers’ electricity bills in equal monthly instalments during the repayment window, a measure aimed at protecting consumers and improving trust in the electricity market.
Cash flow pressure hits sector
Industry participants say the directive arrives at a difficult time for operators within the Nigerian Electricity Supply Industry, many of whom are already grappling with significant liquidity constraints.
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Executives within several distribution companies warn that the reimbursement requirement could deepen existing financial pressures, according to Nairametrics.
Power sector analyst, Mr Ayodele Oni, said that while the order supports consumer rights, it may worsen the financial position of already distressed operators.
“If the persistent tariff gaps and weak revenue recovery in the sector are not addressed, policies like this could aggravate liquidity pressures and limit the ability of operators to invest in network improvements,” he told Nairametrics.
Energy expert, Mr Victor Agboola, said that the directive “is simply too much for operators in the industry,” noting that regulators must not “kill the geese that lay the golden eggs,” while protecting consumers.
MAP scheme
Nigeria introduced the Meter Asset Provider scheme as part of efforts to close the country’s large metering gap and reduce disputes arising from estimated billing.
The framework allows third-party investors to supply prepaid meters directly to electricity customers. Consumers pay upfront for the meters, while distribution companies are expected to gradually reimburse the cost through credits on electricity bills.
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The policy was designed to accelerate the rollout of prepaid meters across the country and reduce reliance on estimated billing. However, progress in addressing the metering gap has been hit by funding limitations, operational delays, and implementation challenges.
Customer complaints regarding delayed meter reimbursements and slow installations have persisted since the programme began.
These issues have continued to fuel tensions between consumers and electricity distribution companies while exposing broader weaknesses within Nigeria’s power sector.
Structural challenges persist
Energy analysts say the refund directive also highlights deeper problems in Nigeria’s electricity market, particularly around tariffs and revenue collection.
Despite several tariff adjustments in recent years, electricity prices in parts of the market are still widely viewed as insufficient to fully cover the cost of supply.
Distribution companies also continue to lose revenue through electricity theft and inefficiencies in billing and collection systems. Aging infrastructure across distribution networks also contributes to technical energy losses, further reducing the revenue available to operators.
At the same time, high operating costs have constrained the ability of many distribution companies to invest in upgrading networks and expanding metering infrastructure.
According to analysts, these factors have collectively contributed to a liquidity crisis across Nigeria’s electricity value chain, affecting generation, transmission, and distribution segments.
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Under the amended order, NERC requires all distribution companies to complete refunds to eligible customers within 12 months.
The total reimbursement obligation is estimated at N20.33 billion. Refunds will be applied directly to customers’ electricity bills and spread across equal instalments throughout the repayment period.
The directive specifically applies to consumers who purchased prepaid meters under the Meter Asset Provider scheme.
Compliance with the repayment schedule will depend largely on the financial strength and operational capacity of individual distribution companies.
In October 2025, the Nigerian government also approved the release of N28 billion to electricity distribution companies under the Meter Acquisition Fund (MAF) Tranche B programme to support the procurement and installation of prepaid meters.
