NERC Directs DisCos to Allocate 60% to CapEx by 2027

The Nigerian Electricity Regulatory Commission (NERC) has issued a directive requiring electricity Distribution Companies (DisCos) to allocate 60% of their earned Non-Administrative Operating Expenditure (Non-Admin OpEx) to capital expenditure (CapEx) starting from February 2027. This order, signed by NERC Chairman Musiliu Oseni and Vice Chairman Yusuf Ali, stipulates that DisCos without outstanding debts must remit 60% of their Non-Admin OpEx to CapEx provision accounts, while 40% will be retained for operational accounts.

DisCos with outstanding debts will allocate 30% to CapEx and 20% to operations, with the remaining 50% directed towards obligations to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO). The directive follows a review in April 2026, which revealed that while many DisCos struggled to meet revenue obligations, some managed to generate excess revenue.

The new framework aims to enhance internal resource deployment for network investment, particularly as DisCos face challenges in accessing external financing. A transitional allocation framework will be in place from August 2026 to January 2027.