Only N60m released from N858bn budgeted to bridge electricity tariff gap – NBET tells senate

The Nigerian Bulk Electricity Trading (NBET) Plc has told the senate that only N60 million was released out of the N858 billion appropriated in the 2025 capital budget to bridge the electricity tariff shortfall.

Johnson Akinnawo, acting managing director of NBET, spoke on Thursday during the agency’s 2025 budget performance review and defence of its 2026 proposal before the senate committee on finance chaired by Sani Musa, Niger east senator.

Akinnawo said persistent underfunding and non-cost-reflective tariffs continue to weaken Nigeria’s electricity market.

He noted that while N858 billion was appropriated to address the tariff gap and outstanding obligations to generation companies (GenCos), the release fell far short of expectations.

“Only N60 million was released,” Akinnawo said, adding that the fund could not be utilised due to procurement process constraints.

“The gap between generation costs and allowed tariffs is substantial, and without government intervention, the market cannot remain stable,” he said.

Akinnawo warned that the non-release of the bulk of the funds has worsened NBET’s debt exposure to GenCos.

NBET was established to purchase electricity from GenCos and sell to distribution companies (DisCos), while guaranteeing payments to power generation firms.

Lawmakers observed that inadequate capitalisation has limited the agency’s ability to effectively discharge its stabilising role in the electricity value chain.

Musa expressed concern over the widening financial strain in the power sector and suggested that the committee might recommend a review of the tariff regime or explore alternative funding mechanisms.

In response, Akinnawo acknowledged that insufficient capitalisation remains a major challenge and said the management had engaged the budget office and the ministry of finance over the non-release of appropriated funds.

He said without adequate funding support, NBET’s capacity to stabilise the electricity market would remain constrained, with implications for power supply nationwide.

Musa advised NBET to submit a comprehensive proposal detailing its funding requirements and strategic plan to address structural challenges in the sector.

The committee is expected to review the submission as part of its consideration of the 2026 budget proposal.