Electric DISCOs in Nigeria grew their revenues by 26.96% to N294.95 billion in Q4 of 2023
The Nigeria Electricity Report for the fourth quarter of 2023 reveals that the DISCOs collected N294.95 billion in revenue during this period, which is an increase from N260.16 billion in the third quarter of 2023. This growth in revenue can be attributed to two factors: an increase in the number of customers and an improvement in electricity supply.
The customer base expanded by 3.4% to reach 12.12 million in the fourth quarter of 2023, compared to 11.71 million in the previous quarter. Similarly, electricity supply rose by 12.2% to 6,432 (Gwh) in the fourth quarter of 2023, up from 5,732 (Gwh) in the previous quarter. However, the rate of revenue growth is likely to be hindered by low metering rates. As of the fourth quarter of 2023, only 46% of the 12.12 million customers have been metered.
Recently, the Nigerian Electricity Regulatory Commission (NERC) approved a new tariff that affects only Band A. While Bands B, C, D, and E remain unchanged, the tariff for Band A has increased from an average rate of N74 per Kwh to N225 per Kwh, representing a 203% increase. The Minister of Power stated that this tariff adjustment aims to enhance liquidity in the electricity sector and support infrastructure upgrades.
However, with half of the customers still unmetered, the sector is vulnerable to revenue losses, which contribute to the liquidity challenges it faces. Universal metering is crucial as it promotes responsible consumption and ensures accurate billing for customers. Additionally, there has been a noticeable rise in National Grid breakdowns in recent months, leading to frequent blackouts.
These disruptions have significant implications for various sectors of the economy. While the tariff increment is intended to attract investors and make the sector financially viable, it will not substantially improve liquidity without addressing the issues of electricity supply and metering rates.
