Nigeria’s Power Sector Liquidity Crisis: NBET Receives Less Than 0.01% of 2025 Allocation
Energy Sector Funding Stalls as NBET Reports Massive 2025 Budget Shortfall
The Nigerian Bulk Electricity Trading (NBET) PLC has revealed a significant disparity in its 2025 fiscal year funding, reporting that only ₦60 million has been released out of a total budgetary allocation of ₦858 billion. This disclosure, made during a budget performance briefing, highlights a critical liquidity challenge within the Nigerian Electricity Supply Industry (NESI).
According to officials from NBET, the ₦858 billion provision in the 2025 budget was intended to address various financial obligations, primarily aimed at bridging the funding gap in the power sector and ensuring payments to Generation Companies (GenCos). However, the actual disbursement of just ₦60 million represents less than 0.01% of the total approved sum.
The Role of NBET in Market Stability
NBET serves as the "manager" of the electricity pool, acting as the bulk purchaser of electricity from GenCos and the bulk seller to Distribution Companies (DisCos). A functional NBET is essential for maintaining the financial health of the value chain. The agency relies on federal government interventions and budgetary allocations to cover shortfalls caused by non-cost-reflective tariffs and collection inefficiencies at the retail end of the market.
The reported funding gap raises immediate concerns regarding the ability of NBET to meet its contractual obligations to power producers. Without the timely release of budgeted funds, the "liquidity squeeze" in the sector is likely to worsen, potentially impacting the ability of GenCos to maintain turbines and purchase gas for power generation.
Implications for Power Generation and the Grid
The massive shortfall in budget implementation poses a direct threat to the stability of the national grid. Historically, GenCos have frequently cited unpaid invoices as a primary reason for reduced generation capacity. According to industry data, the debt profile within the NESI remains a significant bottleneck to achieving a stable 24-hour electricity supply.
The ₦858 billion allocation was widely viewed by stakeholders as a strategic intervention to settle outstanding debts and stabilize the market. The failure to release these funds suggests that the federal government is facing severe fiscal constraints, which may lead to further delays in infrastructure upgrades and service improvements across the country.
Stakeholder Reactions and Transparency
During the presentation of the 2025 budget performance, NBET representatives emphasized the need for a more consistent funding mechanism. The discrepancy between approved figures and actual cash releases has often been a point of contention between the executive arm of government and the legislature.
Analysts suggest that while the 2025 budget was ambitious in its support for the energy sector, the execution remains hampered by the government’s revenue challenges. This lack of fiscal support could force a renewed conversation on electricity tariff adjustments to ensure that the sector can sustain itself without heavy reliance on the federal purse.
Forward-Looking Perspective
The current funding status of NBET necessitates an urgent review of the financial framework supporting Nigeria’s power sector. As the 2026 fiscal year approaches, policymakers must address the persistent "budget-to-release" gap to prevent a total collapse of the electricity market’s commercial viability.
Investors and development partners will be watching closely to see if the Ministry of Finance and the Budget Office of the Federation prioritize the release of the remaining ₦857.9 billion. Failure to do so may result in increased power outages and a heightened risk of insolvency for several players within the electricity value chain.
