Nigeria Moves to Recover $14.2 Million Electricity Debt From 3 African Countries
- The federal government is considering giving restrictions to recover a substantial debt associated with the supply of electricity
- To ensure the recovery of $14.2 million, NERC has asked the Electricity Market Operator to activate the relevant market regulations
- The NERC is worried that the countries to whom Nigeria supplies electricity have not returned the money to Nigeria
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
The federal government is thinking about enacting regulations to recoup a sizable debt related to the provision of power to three African nations, which have resisted requests to pay their debts.
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The Nigerian Electricity Regulatory Commission (NERC) has requested that the Electricity Market Operator (MO) activate the applicable market regulations to secure the recovery of $14.2 million, or around N21.3 billion, that foreign customers owed Nigeria in the first quarter of 2024.
Leadership reported that the MO manages the electricity market and fosters market efficiency since it oversees the Nigerian Electricity Supply Industry's (NESI) market regulations.
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NERC raises concern about payment
The NERC is concerned that the recipient nations that Nigeria supplies power to have neglected to send money back to the country. This was mentioned in the Q1 2024 report from NERC.
The nations that owe money are the Benin Republic, through Société Béninoise d'Energie Electrique (SBEE); the Niger Republic, through NIGELEC; and Togo, through its power utility company, the Togo Electric Energy Company (CEET).
In the report, the regulatory body stated that "none of the four foreign bilateral customers supplied by Generation Companies (Gencos) in the NESI paid the $14.19 million cumulative invoice issued by the MO for services rendered in 2024/Q1."
“As indicated in previous reports, the commission expects the MO to invoke the provision of the market rules to curtail the payment indiscipline being exhibited by local and international bilateral customers.”
Some customers paid up
However, NERC noted that certain bilateral customers, both domestic and foreign, paid outstanding MO invoices from previous quarters during that time.
Two foreign customers paid $5.96 million in total from the backlog of bills, according to the statement.
The report also emphasized that eight local bilateral customers paid N505.71 million to the MO for debts incurred prior to 2024/Q1, while no remittances were made by bilateral customers against the cumulative invoice of N1.86 billion issued to them by the MO for services rendered in 2024/Q1.
“The special customer (Ajaokuta Steel Co. Ltd and the 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 2024/Q1.
“This continues a longstanding trend of non-payment by this customer and the commission has communicated the need for intervention on this issue to the relevant federal government authorities.
It further stated that complete disconnections from the grid might occur if the nonpayment persists.
FG to reduce electricity supply to African Countries
Legit.ng previously reported that following its directives to the System Operator (SO) to limit supplies to foreign customers by 6% of domestic supplies, NERC announced plan to modify electricity delivery to domestic users.
Togo, the Republic of Benin, and the Niger Republic are among the impacted nations.
The development followed significant debt and non-payment of electricity bills that have been provided to the countries over an extended period of time.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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