January 9, 2026/CSL Update
According to the Nigerian Electricity Regulatory Commission (NERC) Q3 2025 report, average energy offtake, defined as the volume of electricity distributed to end-users, declined by 7.1% quarter-on-quarter (q/q) to 3,328.33 MWh/h, from 3,582.6 MWh/h recorded in Q2 2025.
This outcome reflects weaker-than-expected utilisation of the Partially Contracted Capacity (PCC) available for distribution across the grid. The decline underscores persistent inefficiencies within the downstream segment of the power value chain.
The contraction in energy offtake was driven by a combination of structural and demand-side constraints, with distribution infrastructure remaining the primary bottleneck. Aging and fragile distribution networks continue to suffer frequent equipment failures and outages, particularly during the rainy season, when flooding and weather-related disruptions impair network reliability. These challenges significantly limit the ability of Distribution Companies (DisCos) to evacuate available power, resulting in stranded energy despite sufficient supply upstream. Operational inefficiencies, including inadequate feeder capacity and limited investment in network upgrades, further constrain effective electricity delivery.
Demand-side dynamics also weighed on energy offtake during the quarter. Electricity consumption typically moderates in the rainy season due to reduced usage of energy-intensive appliances such as air conditioners and cooling systems. In addition, DisCos continue to adopt conservative load allocation strategies, rationing supply to feeders with high technical, commercial, and collection (ATC&C) losses to manage liquidity pressures. While this approach supports short-term cash flow, it suppresses overall energy distribution volumes and limits revenue growth across the sector.
Looking ahead, sustained improvement in sector performance will depend largely on accelerated investment in distribution infrastructure, improved loss reduction frameworks, and stronger enforcement of service-reflective tariffs. While recent reforms have enhanced cost recovery prospects for DisCos, particularly through targeted tariff adjustments, structural weaknesses in last-mile delivery remain a key downside risk. Until these constraints are addressed, growth in electricity distribution is likely to remain subdued, constraining the broader economic benefits of increased generation capacity and ongoing power sector reforms.
Click here to download full report: CSL Nigeria Daily – 9 January 2026 – Power.pdf
