In a recent revelation, the Nigerian Electricity Regulatory Commission (NERC) has disclosed that three international customers have defaulted on their payments, amassing a staggering debt of $16.11 million for electricity supply during the first quarter (Q1) of 2023.
The exchange rate set by the Central Bank of Nigeria (CBN) as of August 8, 2023, at $1 to ₦768.767, magnifies the issue as the accumulated debt translates to a substantial N12.38 billion in local currency.
This outstanding debt emerges from an international agreement through which Nigeria exports electricity to neighboring countries, including Benin Republic, Togo, and Niger. This initiative, upheld by international treaties, facilitates the exchange of power resources to foster regional collaboration.
According to NERC’s comprehensive Q1 2023 report, electricity sales to international clients were allocated among four companies across the three aforementioned countries. These enterprises comprise Paras-SBEE and Transcorp-SBEE from Benin Republic, Mainstream-NIGELEC from Niger, and Odukpani-CEET from Togo.
The report specifies that none of these international customers fulfilled their payment obligations in relation to the cumulative $16.11 million invoice issued to them during Q1 2023.
“None of the under-listed international customers made any payment against the cumulative $16.11 million invoice issued to them in Q1 2023; Paras-SBEE ($3.46 million), Transcorp-SBEE ($3.85 million), Mainstream-NIGELEC ($5.48 million) and Odukpani-CEET ($3.32 million),” the report reads.
“The market operations (MO) issued invoices to all the eight bilateral customers in the NESI in 2023/Q1 which amounted to N842.38 million. During the quarter, only North-South/Star Pipe made a remittance of ₦15.38 million against an invoice of N24.69 million issued to them.
“This means that for the period, the cumulative remittance performance of bilateral customers was 1.83 percent.”
NERC has expressed concerns over the continued non-remittance of dues by international and bilateral customers, stressing that this persisting trend calls for immediate action. The commission insists on invoking provisions within the market rules to address the growing issue of payment irregularities among various market participants.
Adding to the intricate web of financial discrepancies, the regulator reveals that Ajaokuta Steel Company Limited, along with its host community, has neglected to make any payments in relation to the ₦0.38 billion invoice received from the Nigerian Bulk Electricity Trading (NBET) and the ₦0.08 billion invoice from the Market Operations (MO) for Q1 2023.
Shining a spotlight on the grim financial state, the NERC’s document reveals that as of March 2023, Ajaokuta Steel Company Limited owes an astonishing total of ₦26,715,043,905.73 to NBET and ₦1,739,966,505.69 to the MO.
The regulator has communicated this mounting debt to the federal government, urging swift intervention to tackle this longstanding payment issue.
The non-payment trend exhibited by Ajaokuta Steel Company Limited underscores a pattern of financial negligence. NERC’s proactive stance involves communication with relevant ministries within the Federal Government of Nigeria to address these persisting challenges and ensure the stability of the country’s electricity market.
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