The Nigerian Electricity Regulatory Commission (NERC) has ordered that Distribution Companies (DisCos) remit at least 60 per cent of their earned non-admin operating expenditure to the capital expenditure account from February 2027. According to the Commission, the order is aimed at accelerating network upgrades, improving service reliability, and ensuring that available revenues are invested in critical infrastructure projects.
The Commission, noting the challenges faced by DisCos in accessing external financing, stated that it has become imperative that non-admin OpEx is deployed for network improvement and expansion to ensure improved reliability of supply. With the order, which took effect from September 4, 2026, debt-free DisCos are expected to remit just 50 per cent to the Capex account, then increase the remittance to 60 per cent by February 2027.
The Commission emphasised that all DisCos owing NBET and the Market Operator must complete debt reconciliation and submit Commission-approved repayment plans within 180 days. “A portion of earned Non-Admin OpEx will be earmarked for network rehabilitation, reinforcement, and expansion, based on each DisCo’s debt profile. “Debt-free DisCos are required to remit 50 per cent of earned Non-Admin OpEx to the CapEx account from August 2026, increasing to 60 per cent from February 2027.
“This Order is designed to strengthen distribution infrastructure, improve service delivery, and enhance financial discipline in the electricity sector,” the Order read. The Order, the Commission said, follows a regulatory review of DisCos’ revenue utilisation for the 2025 market cycle. “Pursuant to the provision above, the Commission in April 2026 undertook a review of DisCos’ utilisation of earned Non. Admin OpEx for the 2025 market cycle.
“The review revealed that although many DisCos did not recover sufficient revenues to meet their upstream market obligations, a few of the DisCos recovered revenues which exceeded their upstream market obligations, thereby allowing the