The Nigerian Electricity Regulatory Commission (NERC) has directed electricity distribution companies (DisCos) to channel 50 percent of their earned non-administrative operating expenditure (OpEx) into capital expenditure (CapEx) to accelerate investment in electricity infrastructure.

The revised order on the “Utilisation of Earned Non-Admin OpEx by Successor DisCos,” signed by NERC Chairman Musiliu Oseni and Vice Chairman Yusuf Ali, was released on Wednesday.

Under the new directive, debt-free DisCos are required to remit 50 percent of their earned non-admin OpEx to dedicated CapEx provision accounts from August, with the allocation expected to rise to 60 percent from February 2027.

Earned non-administrative OpEx refers to the portion of operational revenue generated by DisCos that is available for regulated reinvestment, excluding basic administrative expenses.

CapEx covers long-term investments in electricity infrastructure, including network upgrades, expansion and rehabilitation.

NERC said the directive is aimed at accelerating network upgrades, improving service reliability and ensuring that available revenues are invested in critical electricity infrastructure.

The commission also directed DisCos to establish and maintain dedicated CapEx provision accounts for approved network rehabilitation, reinforcement and expansion projects.

According to NERC, the proportion of earned non-admin OpEx to be committed to such projects will be determined partly by the debt profile of each DisCo.

The commission further stipulated that all projects financed through the CapEx provision accounts must receive regulatory approval and be reported to NERC on a quarterly basis.

DisCos indebted to the Nigerian Bulk Electricity Trading Company (NBET) and the market operator are also required to complete debt reconciliation and submit commission-approved repayment plans within 180 days.

NERC said the revised order is intended to strengthen electricity distribution infrastructure, improve service delivery and promote greater financial discipline across the power sector.

The commission said the order took effect on September 4, following a regulatory review of the DisCos’ revenue utilisation for the 2025 market cycle.