The Nigerian Senate has queried the Nigerian Bulk Electricity Trading (NBET) Plc over the non-release of ₦858 billion appropriated in the 2025 budget to bridge electricity tariff shortfall.
NBET’s Acting Managing Director, Johnson Akinnawo, disclosed this on Thursday during the agency’s 2025 budget performance review and defence of its 2026 budget proposal before the Senate Committee on Finance, chaired by Senator Muhammad Sani Musa.
Akinnawo explained that while NBET’s recurrent expenditure for 2025 was funded through regulatory income—covering personnel costs and overheads—the broader electricity market remains under severe strain due to non–cost-reflective tariffs.
He said the Federal Government appropriated ₦858 billion in the 2025 capital budget to address the widening gap between actual generation costs and the tariffs approved for distribution companies (DisCos), as well as to offset outstanding obligations to generation companies (GenCos). However, only ₦60 million has been released so far.
According to him, the ₦60 million released could not even be utilized due to procurement process constraints, leaving the bulk of the intervention funds inaccessible.
“The gap between generation costs and the allowed tariffs is substantial. Without sustained government intervention, the market cannot remain stable,” Akinnawo told lawmakers, warning that the continued non-release of funds has worsened NBET’s debt exposure to GenCos.
NBET was created as a bulk trader in Nigeria’s electricity value chain—purchasing power from GenCos and reselling to DisCos—while providing payment guarantees to generation companies.
Senators observed that inadequate capitalization has significantly weakened the agency’s ability to fulfill this stabilizing mandate.
Expressing disgust over the sector’s mounting liabilities, Committee Chairman Senator Sani Musa questioned whether the legislature should consider a review of the existing tariff regime or explore alternative funding mechanisms to close the widening financial gap.
“Should the committee consider recommending a review of the tariff regime or explore alternative funding mechanisms to address this shortfall?” Musa asked during the session.
The committee also sought clarification on whether NBET intends to pursue additional capitalization to strengthen its operations and restore confidence in the market.
Replying, Akinnawo admitted that insufficient capitalization remains a core structural challenge.
He disclosed that NBET’s management has engaged the Budget Office and the Ministry of Finance regarding the non-release of the appropriated funds.
He warned that without adequate financial backing, NBET’s role as a stabilizing intermediary in the electricity market would remain severely constrained, with ripple effects on power generation and overall electricity supply nationwide.
Senator Musa directed NBET to submit a comprehensive funding proposal and strategic roadmap detailing how it intends to address the sector’s structural weaknesses.
