The federal government of Nigeria is considering regulatory actions to recover significant debts owed by four African countries for electricity supply.
The Nigerian Electricity Regulatory Commission (NERC) has directed the Electricity Market Operator (MO) to enforce relevant market rules to recover $14.2 million (about N21.3 billion) owed by international customers in the first quarter of 2024.
The MO, which administers the market rules of the Nigerian Electricity Supply Industry (NESI), is responsible for managing the electricity market and promoting its efficiency.
NERC has expressed concern over the failure of these countries to remit payments for electricity supplied by Nigeria. This issue was detailed in NERC’s Q1, 2024 report.
The debtor countries include Niger Republic, through its utility NIGELEC; Benin Republic, through Société Béninoise d’Energie Electrique (SBEE); and Togo, through the Togo Electric Energy Company (CEET).
The report stated, “None of the four international bilateral customers supplied by Generation Companies (Gencos) in the NESI made payments against the cumulative invoice of $14.19 million issued by the MO for services rendered in Q1 2024. As indicated in previous reports, the commission expects the MO to invoke market rules to address the payment indiscipline exhibited by local and international bilateral customers.”
However, NERC also noted that during this period, some bilateral customers, both local and international, made payments for outstanding MO invoices from previous quarters. A total of $5.96 million was paid by two international customers from their debt backlog.
The report also highlighted that no payments were made by bilateral customers against the cumulative invoice of N1.86 billion issued for services rendered in Q1 2024. However, the MO received N505.71 million from eight local bilateral customers towards debts incurred before Q1 2024.
“Ajaokuta Steel Co. Ltd and its host community did not make any payment towards the N1.27 billion Nigerian Bulk Electricity Trading (NBET) and N0.09 billion (MO) invoices received in Q1 2024. This continues a longstanding trend of non-payment by this customer, and the commission has communicated the need for intervention to the relevant federal government authorities. Continued non-payment may result in total disconnection from the grid,” the report added.
