Nigeria’s electricity regulator has revised the rules governing how distribution companies use their operating income, requiring them to channel part of their earned non-administrative operating expenditure into projects that improve the power network. The Nigerian Electricity Regulatory Commission (NERC) said the measure is intended to speed up grid rehabilitation, reinforcement and expansion, make electricity supplies more dependable and ensure that available revenues are directed toward essential infrastructure.
The revised Order on the use of earned Non-Administrative Operating Expenditure by successor Distribution Companies, or DisCos, was issued on Wednesday and took effect on September 4, 2026, following a review of revenue utilisation during the 2025 market cycle. Under the new framework, every DisCo must create and maintain a dedicated Capital Expenditure Provision Account for approved network-improvement work. The share of non-administrative operating expenditure to be set aside will depend on each company’s debt position. Debt-free DisCos must transfer 50% of their earned Non-Admin OpEx to those accounts from August 2026, with the requirement rising to 60% from February 2027.
NERC said spending from the CapEx Provision Accounts will be permitted only for projects approved by the Commission, while the companies must provide quarterly reports on implementation. DisCos that owe money to Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator have also been given 180 days to reconcile their liabilities and submit repayment programmes approved by the regulator. NERC said the revised rules are intended to reinforce distribution infrastructure, raise service standards and impose stronger financial discipline across the electricity market. It added that the policy should help direct distribution-company revenues toward major infrastructure shortfalls and improve the quality of electricity delivered to consumers nationwide.
