• Monday, March 04, 2024
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TCN suspends operations at Ajaokuta Steel over N33bn debt

TCN suspends operations at Ajaokuta Steel over N33bn debt

The Transmission Company of Nigeria (TCN) has suspended operation at the moribund Ajaokuta Steel Company Limited (ASCL) due to its failure to settle a debt of N33 billion owed to the Nigerian Bulk Electricity Trading PLC (NBET) and Service Providers.

The order, dated January 4, 2024, and signed by E.A. Eye, AG, ED independent system operator, revealed that the defaults comprised N30,849,749,981.01 for energy and capacity delivered by NBET and N2,221,252,148.48 owed to Service Providers.

In addition, TCN has threatened termination of ASCL’s Market Participation Agreement if the defaults remain unresolved after 30 business days of disconnection.

Read also: FG partners UBA, Stanbic IBTC on N35bn fund to revive Ajaokuta steel mill

The order read: “This is a formal suspension notice to ASCL due to non-compliance with provisions of the Market Rules as of the November 2023 billing cycle, ASCL has accumulated a total outstanding debt of N33,071,002,129.49, comprising N30,849,749,981.01 for energy and capacity delivered by NBET and N2,221,252,148.48 owed to Service Providers.

“On the 20th of March 2023, the MO issued a notification to ASCL for non-compliance with the Market Rules and requested corrective actions within a specified period, as advertised in three national newspapers.

“Despite a Ministerial Intervention by the Honorable Minister of Power, which temporarily halted enforcement actions to allow Ajaokuta Steel Company Limited (ASCL) the opportunity to rectify its defaults, these defaults remain unresolved.”

According to the transmission company, ASCL is required to settle all outstanding invoices and provide an adequate Bank Guarantee of N70,177,727.39 for MO’s invoice and N320,000,000.00 for NBET’s invoice, within fourteen [14] days from the date of this notice to avoid disconnection.

“Failure to rectify these defaults within the specified period will lead to the disconnection of ASCL’s network from the National Grid, in accordance with section 45 of the Market Rules.”