NISO Rejects DisCos’ Debt Plans, Threatens Sanctions Over Electricity Market Obligations

The Nigeria Independent System Operator (NISO) has rejected some repayment proposals submitted by electricity Distribution Companies (DisCos) over their outstanding obligations to the Nigerian Electricity Market, warning that applicable sanctions could follow if the debts remain unresolved.

The development followed a four-day public hearing convened by NISO from September 1 to 4, 2026, to examine the size and age of DisCos’ outstanding liabilities and their proposed strategies for settling the debts.

The hearing was conducted by a five-member committee chaired by NISO’s Executive Director, Market Operations, Engr. Dr Edmund Eje.

NISO said some of the payment proposals submitted by the DisCos were unacceptable, citing the scale of the outstanding liabilities and the need to restore payment discipline within the electricity market.

The system operator noted that the Federal Government had already effectively cleared about 97 per cent of DisCos’ obligations accumulated between 2015 and 2020 through netting arrangements.

With only the outstanding balances left to be addressed, the committee urged the affected DisCos to take immediate steps towards full repayment.

NISO said it would proceed with the next stage of action, including the imposition of applicable sanctions under the Electricity Market Rules, while maintaining avenues for further engagement with the affected companies.

The move signals a tougher approach to debt recovery in Nigeria’s electricity market, where persistent liquidity challenges and payment defaults have continued to affect the financial stability of market participants.

The development also places greater pressure on DisCos to regularise their obligations as the industry seeks to strengthen financial discipline, improve confidence among investors and sustain electricity supply.

NISO’s position underscores the importance of timely settlement of market obligations to the functioning of the electricity value chain, particularly amid ongoing efforts to reform Nigeria’s power sector.