The Nigerian Bulk Electricity Trading (NBET) Plc has disclosed that only N60 million was released from the N858 billion appropriated in its 2025 capital budget to address electricity tariff shortfalls.
The disclosure was made by its Acting Managing Director, Johnson Akinnawo, during the agency’s 2025 budget performance review and defence of its 2026 proposal before the Senate Committee on Finance.
He warned that persistent underfunding and non-cost-reflective tariffs continue to weaken the country’s electricity market and threaten its stability.
Akinnawo explained that the significant gap between appropriated funds and actual releases severely constrained the agency’s ability to meet its obligations to power generation companies.
Lawmakers expressed concern over the widening financial strain in the power sector and its implications for electricity supply nationwide.
What NBET is saying
Akinnawo told lawmakers that despite the N858 billion appropriation to address tariff gaps and outstanding obligations to generation companies, actual funding fell drastically short. He stressed that the limited release affected NBET’s overall budget performance for the year.
- “At the close of the year, only N60 million was released toward the end of the year. Unfortunately, because of that, our budget performance was affected.”
- “There remains a gap between the cost of generation, transmission, and distribution of electricity.”
- “Every GenCo gets paid an equal percentage from whatever collections come from the DisCos. The Federal Government, through the Ministry of Finance, covers the funding gap arising from partial risk guarantees to make up the difference.”
- “The gap between generation costs and allowed tariffs is substantial, and without government intervention, the market cannot remain stable.”
He added that the N60 million released could not be utilised due to procurement process constraints, further compounding the agency’s funding challenges.
Get up to speed
NBET was established as a stabilising institution in Nigeria’s power sector, purchasing electricity from generation companies and selling to distribution companies, while guaranteeing payments to power producers. Its role is central to maintaining liquidity across the electricity value chain.
However, the agency has long grappled with structural deficits in the market.
- The electricity tariff structure has remained largely non-cost-reflective, creating a persistent gap between actual generation costs and approved tariffs.
- Distribution companies remit collections to NBET, which are then used to pay generation companies, but collections are often insufficient.
The Federal Government intervenes to cover funding gaps through the Ministry of Finance, including partial risk guarantees.
Delays or shortfalls in government releases have repeatedly affected NBET’s ability to meet obligations.
These structural weaknesses have left NBET increasingly exposed to mounting debts owed to generation companies.
What you should know
The funding gap has already translated into significant debt exposure for NBET, with implications for the broader electricity market.
- In 2025, management of Niger Delta Power Holding Company (NDPHC) Limited raised concerns over a N600 billion debt owed by NBET, warning that it was severely hindering its operations.
- NBET has engaged the Budget Office and the Ministry of Finance over the non-release of appropriated funds.
Without improved capitalisation and sustained funding support, stakeholders warn that NBET’s ability to stabilise the electricity market may remain constrained, with potential consequences for power generation, liquidity in the sector, and electricity supply nationwide.
