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By Uche Usim
Electricity distribution companies (DisCos) in Nigeria are facing fresh financial pressure following a directive by the Nigerian Electricity Regulatory Commission (NERC) requiring them to refund N20.33 billion to customers who purchased prepaid meters under the Meter Asset Provider (MAP) scheme.
The directive, contained in an amended order issued by the regulator on March 1, 2026, mandates DisCos to reimburse affected customers within 12 months.
Under the order, the refunds will be credited to customers’ electricity bills in equal installments over the repayment period, a move aimed at strengthening consumer protection and restoring confidence in Nigeria’s electricity market.
However, industry stakeholders say the directive comes at a time when electricity distribution companies are already grappling with severe liquidity constraints across the Nigerian Electricity Supply Industry.
Executives within several DisCos warn that the order could further strain their fragile financial positions and worsen existing cash flow pressures.
“These challenges have significantly constrained the cash flow available to distribution companies for infrastructure maintenance, network expansion, and metering investments,” a senior manager at the Abuja Electricity Distribution Company (AEDC) said.
Power sector analyst, Ayodele Oni, noted that while the directive is necessary from a consumer protection standpoint, the financial reality facing operators cannot be ignored.
“While the directive is understandable from a consumer protection perspective, the reality is that most DisCos are already financially distressed,” he said.
“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 added.
Energy economist, Benjamin Emmanuel, also warned that forcing operators to make such large refunds within a limited timeframe could deepen sector liquidity challenges.
“Requiring DisCos to refund such a large amount within a short period without improving sector liquidity could put additional pressure on already weak balance sheets,” he said.
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Similarly, power sector consultant Adedayo Ademiluyi said the directive reflects the long-standing financial fragility of Nigeria’s electricity distribution segment.
“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 the refund directive should be accompanied by broader reforms to improve sector liquidity and reduce operational losses.
“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 address Nigeria’s longstanding metering gap and reduce disputes arising from estimated billing. Under the policy, third-party investors supply prepaid meters to consumers, who pay upfront for the meters and later recover the cost through reimbursements from distribution companies.
While the programme was designed to accelerate meter deployment nationwide, implementation challenges, funding constraints, and operational delays have slowed progress in closing Nigeria’s metering gap.
Customer complaints over delayed refunds and slow meter installations have persisted since the scheme was introduced, highlighting structural weaknesses in the country’s electricity sector.
Energy analysts say the refund directive underscores deeper issues within Nigeria’s electricity market, particularly around tariffs, revenue collection, and energy losses.
Distribution companies continue to suffer significant revenue losses due to electricity theft, weak billing systems, and unpaid electricity bills from several large consumers, including government institutions.
Persistent energy losses across ageing distribution infrastructure further reduce the revenue available to operators, limiting their ability to invest in network upgrades and metering infrastructure.
The regulator has directed that all refunds under the amended order must be completed within 12 months, with reimbursements credited directly to customers’ electricity bills in equal installments over the repayment period.
Industry experts say the ability of DisCos to comply with the directive will largely depend on their financial capacity and operational performance.
