4 African Countries Owe Nigeria $14.2m Electricity Debts

The federal government is considering taking regulatory measures to recover huge debt from electricity supply to four African countries that have reluctantly ignored calls to address their debt obligations.

To recover the debt, the  Nigerian Electricity Regulatory Commission (NERC) has asked the Electricity Market Operator (MO) to activate the relevant market rules to ensure recovery of $14.2 million (about N21.3 billion) owed Nigeria by international customers in Q1, 2024.

The MO administers the market rules of the Nigerian Electricity Supply Industry (NESI) and is therefore responsible for the administration of the electricity market and promoting efficiency in the market.

The NERC is worried that the beneficiary countries being supplied electricity by Nigeria have failed to remit monies to the country. This was contained in NERCs Q1, 2024 report.

The debtor countries are Niger Republic, through its power generation and transmission utility, NIGELEC; Benin Republic through Société Béninoise d’Energie Electrique (SBEE)and Togo through its power utility firm, the Togo Electric Energy Company (CEET).

The regulator in the report noted, “None of the four international bilateral customers being supplied by Generation Companies (Gencos) in the NESI made payment against the cumulative invoice of $14.19 million 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,”.

However, NERC stated that during the period, some bilateral customers (both local and international) made payments for outstanding MO invoices from previous quarters. It stated that cumulatively, a total of $5.96 million was paid by two international customers from the backlog of debts.

The report also stressed that 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 but the MO received N505.71 million from eight local bilateral customers as payment towards debts that were incurred pre- 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.

A continuation of the non-payment may trigger total disconnection from the grid,” it added.