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ATC&C Losses of 11 DisCos Leap to 51%—Agusto

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ATC&C Losses

By Modupe Gbadeyanka

In 2020, the 11 electricity distribution (DisCos) operating in Nigeria recorded aggregate technical, commercial and collection (ATC&C) losses of 51 per cent, higher than 45 per cent in 2019.

The rise in ATC&C losses was largely due to the impact of the COVID-19 pandemic, a report by a local rating agency, Agusto & Co, stated, adding that this high loss level remains one of the many reasons for the kickback from electricity consumers on tariff increases, especially in the absence of a significant and immediate improvement in power supply.

The firm said last year, the energy companies only billed for 74 per cent of the energy received from the transmission company, lower than the 81 per cent reported in the prior year.

Billing efficiency, which has historically been impaired by a low metering rate and energy theft, with only 37 per cent of registered electricity customers metered in 2020, was severely impacted by the global health crisis, it added.

Agusto said it believes the impact of the pandemic was more visible amongst consumer groups with post-paid meters and estimated bills given that the social distancing rules and movement restrictions established to curb the spread of the virus impaired the physical billing process. Collection efficiency also fell marginally to 66 per cent from 68 per cent one year prior.

Since the privatisation exercise that commenced in 2013, the electric power industry in Nigeria has remained fraught with many of the same challenges ranging from unreflective tariffs to high loss levels, obsolete infrastructure, weak policy implementation and gas shortages. All of these have culminated in a weak and erratic power supply and dependence on self-generation by many businesses and households.

“These challenges have not only weakened the ability of operators to meet electricity demand but also threaten their financial viability, with significant implications for the fiscal health of the country.

“Despite the series of amendments to the tariff structure, cash flows from MYTO (the Multi-Year Tariff Order) have remained insufficient to fully cover the costs of electricity supplied.

“The fear of the impact of a ‘rate shock’ on consumers and the accompanying loss of political capital has prevented the effective implementation of necessary amendments that will align the MYTO’s assumptions with economic realities. Electricity has thus consistently been sold at a discount, with end-user electricity tariffs much lower than the cost of electricity supplied,” a part of the report said.

“The shortfall from unreflective tariffs has been borne in large parts by the Federal Government of Nigeria (FGN) through multiple intervention funds and payment assurance facilities from the Central Bank of Nigeria (CBN) totalling close to N2 trillion ($4.9 billion) as at the end of 2020, equivalent to c.6 per cent of CBN’s balance sheet.

“Despite this level of intervention, the generating companies had estimated receivables of over N400 billion in 2020 alone. Whilst the interventions have been central in ensuring the profitability of operators along the industry’s value chain, they remain insufficient and unsustainable,” it added.

More recently, there have been notable efforts by the primary regulator – NERC – to minimise the challenges faced by operators in the Industry.

In particular, tariffs have been raised to near cost-reflective levels and adjusted to match consumption via an initiative dubbed Service Reflective Tariffs (SRT). The new tariff model as the name indicates is expected to reflect and match the quality of service received by the ultimate consumers of electricity.

Distribution companies will therefore discriminate in the application of tariffs; consumers who enjoy longer daily supply will be expected to pay higher rates and vice versa.

The SRT like other MYTO models has key estimates (and projections) for macroeconomic and industry-specific indicators including inflation, exchange rates and electricity generation.

Other company-dependent factors considered in the determination of tariffs include the amount of electricity received and the aggregate technical, commercial and collection (ATC&C) losses. Ultimately, tariff shortfalls (the difference between end-user tariffs and cost-reflective tariffs) are expected to taper off by the end of 2022, with tariffs fully reflective and sufficient to cover the cost of production, the report further said.

“Whilst a number of the assumptions align with market realities, we note that the inflation and electricity generation estimates in the SRT model are much higher than the actual entries reported for the corresponding periods.

“In our view, these disparities have the potential to impair the attainment of cost reflectiveness. Agusto believes adopting scenario analysis and modelling will provide a more robust framework to determine an appropriate tariff structure for the Industry in a dynamic macroeconomic environment such as Nigeria’s,” it said.

“In addition to the SRT, the primary regulator – the National Electricity Commission (NERC) – introduced a minimum remittance threshold for each distribution company which stipulates a mandatory payment that must be made to the bulk trader for electricity received.

“Furthermore, in February 2020, NERC introduced guidelines for ‘Merit Order Dispatching’ which involves ranking electricity generation and dispatch by the transmission company of Nigeria (TCN) in ascending order of costs with the cheapest electricity – such as those from Hydro plants with no fuel cost component – ahead of more expensive plants.

“The order also provides guidelines on the alignment of invoicing for capacity charge and energy delivered as well as a framework for the settlement of any imbalance between DisCos and TCN. The Merit Dispatching Order should eliminate the shift of responsibility for load rejection prevalent between DisCos and the TCN and improve the technical and operational efficiencies of these operators,” it also stated.

Concluding, Agusto said, “While operators are generally optimistic that the new tariffs and accompanying regulations would enhance efficiency and position the Industry on the trajectory towards achieving financial independence and ultimately improvements in the volume and quality of electricity supply.”

“In our view, to truly achieve the objectives of privatisation, reforms need to be accompanied by a strong and enabling regulatory environment.

“Furthermore, improved access to finance, efficiency in billing and metering as well as consistent and secure gas supply is vital to reap the benefits of privatization in the long run.

“While the journey to constant electric power supply remains far and long-winded, Agusto & Co believes the initiatives undertaken by the primary regulator – NERC– if consistently enforced have the potential to move the industry forward in the right direction,” it said.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Senate Passes State Police Bill

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Senate Petroleum Industry Bill

By Aduragbemi Omiyale

The bill seeking to establish state police in Nigeria was on Wednesday, June 24, 2026, passed by the Senate during a plenary presided over by the Senate President, Mr Godswill Akpabio.

The piece of legislation was passed today after more than two-thirds of the lawmakers in the red chamber of the National Assembly voted in support via a manual voting process involving the raising of hands.

Before the passage at the plenary, the chairman of the Senate Committee on the Review of the Constitution, Mr Barau Jibrin, presented the panel’s report to his colleagues.

According to him, the bill will transform policing in the country and boost security, as it allows the sub-nationals to create their own policing system.

The bill provides for the Federal Police Service to be headed by the Inspector-General of Police, while the State Police Service will be led by a Commissioner of Police, who will be appointed by the governor of the state, subject to confirmation by the state’s House of Assembly.

To prevent the misuse of state police against political opponents or critics, ensuring that any action taken against such individuals or groups complies with due process and existing laws, the bill prohibits the Commissioner of Police of a state from arresting, detaining, investigating, or deploying force against any critic of the state governor, except in accordance with the law.

After the clauses of the bill were considered at the Committee of the Whole, the bill was passed and will be transmitted to the President for assent into law.

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Daystar Power Expands Nestlé Solar Partnership Across West Africa

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Daystar Power

By Adedapo Adesanya

Daystar Power Group has expanded its renewable energy partnership with Nestlé in West Africa, commissioning solar power systems with a combined capacity of 6.884 megawatts across four manufacturing facilities in Côte d’Ivoire, Ghana, and Senegal.

According to a statement, the deployments bring the total installed capacity across Nestlé’s sites to 6,884 kWp, nearly 7 megawatts, making it one of the largest commercial and industrial solar partnerships in the region.

The four sites, two in Abidjan, one in Tema, and one in Dakar, are all fully operational, with each system designed around the specific grid and operational profile of its location.

“Nearly 7 megawatts across four Nestlé facilities is a number we are proud of, but what it represents matters more than the figure itself. It means that one of the world’s most demanding manufacturers has tested our model, trusted it, and come back. Our job now is to keep earning that, across every market where industry needs energy it can count on,” Mr Yischai Beinisch, CEO, Daystar Power Group said in a statement.

The partnership began with a single commissioning and expanded to span three countries and four facilities. In Côte d’Ivoire, Daystar Power has delivered 3,447 kWp across two Abidjan sites. In Ghana, a 2,547 kWp system powers Nestlé’s Tema factory. In Senegal, an 890 kWp installation operates at the Dakar facility.

The company said each system is sized and configured to deliver measurable environmental and social impact, including reduced greenhouse gas emissions and improved energy resilience. The design is tailored to the operational and grid conditions at each location, ensuring reliable, clean energy access while supporting local development and aligning with Nestlé’s publicly stated net-zero commitments.

Adding his input, Mr Samer Chedid, CEO, Nestlé Central and West Africa Region, said the investment reflects its commitment to building a business that not only grows but does so responsibly.

“By advancing solar energy projects in Ghana, Côte d’Ivoire, and Senegal, we are embedding sustainability into our growth, reinforcing our role as a force for good, creating long-term value for communities, and ensuring that our footprint actively contributes to a cleaner, more resilient future,” he said.

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Nigeria Adopts New Security Framework to Safeguard Oil Assets

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oil assets

By Adedapo Adesanya

Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Federal Ministry of Defence have agreed to deepen collaboration on the protection of critical oil and gas infrastructure through a new non-kinetic security framework designed to curb threats, strengthen community relations and sustain rising output.

The initiative comes as Nigeria recorded crude oil production of nearly 1.8 million barrels per day, one of the highest production levels in recent years, amid intensified efforts to combat crude oil theft, pipeline vandalism and other security challenges across the Niger Delta.

Speaking during a courtesy visit by a delegation from the Ministry of Defence to the Commission’s headquarters in Abuja, the chief executive of NUPRC, Mrs Oritsemeyiwa Eyesan, said the country’s recent production gains were directly linked to coordinated interventions involving security agencies and industry stakeholders.

“Today, we are benefiting from those efforts. Last month, we recorded production of nearly 1.8 million barrels per day throughout the month,” Mrs Eyesan said.

She noted that sustained investments in security operations, technology deployment and human capacity development had significantly improved production stability and operational efficiency in the upstream petroleum sector.

According to her, maintaining and expanding the gains has become critical as Nigeria seeks to increase crude oil output, attract fresh investments and maximise revenue generation from the petroleum industry.

“As we look to the future, we desire to grow production and must have assurances that security threats can be effectively managed. We can only achieve this through stronger collaboration with security agencies and industry stakeholders,” she stated.

Mrs Eyesan stressed that safeguarding oil and gas assets remains central to Nigeria’s energy security strategy and economic growth objectives, noting that production assurance has become a key requirement for investors considering new upstream projects.

She disclosed that the Commission was exploring wider deployment of advanced technologies, including drone surveillance systems, to improve monitoring of the country’s vast oil and gas infrastructure network and detect threats before they escalate into operational disruptions.

The NUPRC boss further revealed that the Commission would work closely with operators to refine and implement a new security framework, while providing leadership in stakeholder engagement and governance structures needed to ensure long-term sustainability.

The Minister of Defence, Mr Christopher Gwabin Musa, said the Ministry was introducing a non-kinetic security intervention model aimed at addressing the underlying causes of insecurity in oil-producing communities.

Rather than relying solely on military operations, he explained that the strategy would focus on community engagement, youth empowerment and social inclusion programmes to build lasting peace around critical energy infrastructure.

“One of the best ways to engage youths in oil-producing areas is through sports-based interventions,” Mr Musa stated.

He explained that the initiative would utilise sports development programmes to channel youthful energy into productive activities, reduce vulnerability to criminal networks and strengthen community ownership of critical national assets.

The Defence Minister, who was represented by one of his aides, added that the intervention would also include structured programmes for persons living with disabilities, creating broader opportunities for participation and economic inclusion in host communities.

According to him, the initiative aligns with the Host Community Development provisions of the Petroleum Industry Act (PIA) and is expected to strengthen relationships between operators and host communities while promoting sustainable development.

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