Power sector struggles as foreign customers owe $25.68m

International bilateral customers in Nigeria’s electricity sector, in the first nine months of 2024, accumulated a significant electricity debt of $25.68 million for the services rendered to them in the period.

These debtors include Paras SBEE and Transcorp SBEE from Benin Republic, Odukpani-CEET from Togo, and Mainstream-NIGELEC from Niger Republic.

BusinessDay’s analysis of the first, second and third quarter report as published by the Nigerian Electricity Regulatory Commission (NERC), showed that no payment was made against the total $14.19 million invoice issued to these customers by the m arket operator (MO) for services rendered in the first quarter of the year (Jan-March).

Also, no remittances were made by bilateral customers within the country against the cumulative invoice of N1.860 billion issued to them by the MO for services rendered in the period.

Ajaokuta Steel Co. Ltd and the host community, referred to as ‘special customer’ did not make any payment towards the N1.27 billion (NBET) and N0.09 billion (MO) invoices received in the period.

In the second quarter (April – June) the international bilateral customers serviced by the market operator made a cumulative payment of $9.81 million against the $15.60 million invoice issued to them for services rendered in the period, leaving $5.79 million outstanding.

The domestic bilateral customers made a payment of N1.295 billion million against the cumulative invoice of N1.991 billion issued to them by the MO for services rendered in 2024/Q2 translating to 65.07 percent remittance performance. Special customer, Ajaokuta Steel Co. Ltd and the host community did not make any payment towards the N1.39 billion (NBET) and N0.11 billion (MO) invoices received in 2024/Q2.

Also, in the third quarter, the international bilateral customers purchasing power from the grid-connected GenCos made a cumulative payment of $6.49 million against the $12.19 million invoice issued to them by the MO for services rendered.

The domestic bilateral customers made a cumulative payment of N1.566 billion against the invoice of N2.100 billion issued to them by the MO for services rendered in 2024/Q3 translating to 74.57 percent remittance performance
This is as the federal government continues to subsidise electricity consumed in the country on a monthly basis.

Despite the increased tariff implemented by NERC in April, BusinessDay’s findings revealed that the federal government spent over N1.9 trillion on electricity subsidy from January to November 2024.

The subsidy payment has continued to widen for failure of electricity distribution companies (DisCos) to achieve a 100 percent collection of revenue for electricity billed on a monthly basis.