NBET to Senate: Only N60m released from N858bn power tariff support fund as electricity market strains deepen

Nigeria’s fragile electricity market is facing renewed financial pressure after the Nigerian Bulk Electricity Trading (NBET) Plc revealed that only N60 million was released from the N858 billion set aside in the 2025 federal capital budget to cushion the country’s electricity tariff shortfall.

The disclosure was made by Acting Managing Director of NBET, Mr Johnson Akinnawo, during a budget defence session before the Senate Committee on Finance on Thursday. The meeting was part of NBET’s presentation on its 2025 budget performance and its funding request for 2026. The committee is chaired by Senator Sani Musa (Niger East).

The allocation was originally designed to help close the growing gap between the actual cost of producing electricity and the lower, government-approved tariffs paid by consumers. It was also intended to settle outstanding obligations owed to power generation companies (GenCos), whose revenues depend largely on payments guaranteed by NBET. However, Mr Akinnawo said the reality fell far short of expectations.

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According to him, despite the scale of the appropriation, NBET received only a tiny fraction of the funds. He told lawmakers that the amount released – N60 million – was so insignificant that it could not be deployed effectively. He added that even this limited sum became unusable due to procurement process constraints, leaving the agency unable to meet any of its intended obligations.

Mr Akinnawo explained that Nigeria’s power market continues to suffer from a structural mismatch between costs and revenue. While generation expenses have risen, consumer tariffs remain below cost-reflective levels. This situation, he said, forces the government to provide intervention funds to prevent the market from collapsing. Without such support, the system cannot remain financially viable.

He warned that the failure to release most of the approved funds has worsened NBET’s debt exposure to GenCos, further straining the electricity value chain. Many of these generation companies rely on NBET as a payment guarantor, and delays or shortfalls in funding directly affect their operations and ability to maintain power plants.

NBET was established as a central trading entity in the power sector. Its role is to purchase electricity from GenCos and sell it to distribution companies (DisCos), while ensuring that GenCos are paid. This arrangement was designed to stabilise the market and reduce financial risk across the sector. However, lawmakers observed that inadequate capitalisation has severely limited NBET’s capacity to perform this role.

Members of the Senate committee noted that the agency’s weakened financial position is symptomatic of a wider crisis in the electricity industry. They expressed concern that persistent underfunding could eventually threaten nationwide power supply, as GenCos may struggle to sustain production without reliable payments.

Committee Chairman, Mr Sani Musa, said the growing financial strain requires urgent policy attention. He suggested that the Senate may recommend a review of the current electricity tariff framework or consider alternative funding mechanisms that would reduce the sector’s dependence on irregular government support.

In response, Mr Akinnawo acknowledged that insufficient capital remains one of NBET’s most serious challenges. He told the committee that management has been engaging both the Budget Office and the Ministry of Finance to understand why the appropriated funds were not released.

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He added that unless NBET receives adequate financial backing, its ability to stabilise the electricity market will remain constrained. This, he warned, could have far-reaching consequences for the power sector and for electricity supply across the country.

Mr Musa advised NBET to prepare a comprehensive submission outlining its funding requirements and a clear strategy for addressing the structural weaknesses in the sector. He said such a document would help lawmakers assess what reforms and financial interventions may be necessary.

The committee is expected to review NBET’s proposal as part of its ongoing consideration of the 2026 federal budget, with the goal of strengthening Nigeria’s power market and ensuring more reliable electricity for consumers nationwide.