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DISCOs Revenues Rise 6.6% YoY to N393.1bn in H1 2022



By United Capital Research Team

Data from the Q1/Q2-2022 Electricity report released by the National Bureau of Statistics (NBS) revealed that the total electricity supplied by the eleven DISCOs in H1-2022 was 11,182.5GWh, down from 12,055GWh in the same period in 2021. The report also showed that despite a decline in electricity supply, total number of customers connected to the grid increased by 5.4% y/y to 10.8mn customers.

The report further revealed that the revenues generated by the DISCOs increased by 6.6% y/y to N393.1bn in H1-2022, with revenues from AEDC, EKEDC and IEDC accounting for 50.2% of this amount. Although signifying growth, the sector continues to struggle primarily due to the inability of discos to collect receipts despite various interventions, such as NERC’s Meter Asset Provider program (2018) (NMMP), which had limited effectiveness in closing the metering gap. Despite multiple programs, the latest data from the NBS estimates that the percentage of metered customers as of June 2022 was 45.9% of the total customers.

We remain pessimistic in our outlook on the electricity sector. The Power Generation Trend report (2013 to Aug-2022), obtained from the Association of Power Generation Companies, indicated that available power generation capacity has dropped to 5,634.47MW as of Aug-2022 from 6,616.28MW in 2015.

The perennial challenges faced by the sector, such as inadequate & decrepit infrastructure and the lack of investment in the sector and an increasing deficit in the amount of skilled labour, persist. In addition, the flooding in some areas of the country has caused the NLNG to declare a force majeure, indicating lower gas supply to the electricity generation companies, which would have knock-on effects resulting in more grid collapses (this year alone, the national grid has collapsed four times), lower generation capacity and reduced electricity hours going forward.

However, with the sector still in a transitory phase and its growth potential, the industry can still attract more private investments in the future if metering gap and revenue collection can be improved.

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