Benin, Niger Owe Nigeria N32.1bn Electricity Debt – NERC
The Nigerian Electricity Regulatory Commission (NERC) has disclosed that a total of N32.1 billion is the outstanding debt owed the country by Benin and Niger Republic for electricity supply to the two countries in 2019.
Four reports obtained by Economic Confidential for the four quarters of 2019 suggested that the countries that get electricity supply from Nigeria on a diplomatic trading framework, actually paid nothing to the country within the period.
According to the NERC, all the supply invoices sent to the countries through their national electricity corporations – Societe Nigerienne d’electricite (NIGELEC) and Communaute Electrique du Benin (CEB) by the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operator (MO) were yet to be paid for.
The power regulator lamented that the debt with other challenges such as low remittances by the country’s 11 distribution companies (Discos), high technical and commercial loss levels, as well as transmission constraints, contributed to the poor showings of the country’s electricity industry in the year covered.
In NERC’s first quarter 2019 report, it said that, “during the same period, the invoices issued to Ajaokuta Steel Co. Ltd (designated as special customer) and international customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) were N0.3 billion and N12.8 billion respectively.
“However, neither NBET nor MO received payments from the special and international customers during the period under review. The Nigerian government has continued to engage governments of neighbouring countries benefitting from the export supply to ensure timely payments for the electricity purchased from Nigeria.”
Further in the second quarter, the NERC noted that, “the invoices issued to Ajaokuta Steel Co. Ltd (designated as special customer) and international customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) stood at N0.32 billion and N10.85 billion respectively,” adding that during the quarter under review, the special and international customers made no payment to NBET and MO while the Nigerian government continued to engage governments of neighbouring countries benefitting from the export supply to ensure timely payments for the electricity purchased.
Also, in the third quarter, the regulator explained that the special and international class of customers made no payment to NBET and MO with the invoices issued to Ajaokuta Steel Co. Ltd (designated as special customer) and NIGELEC and CEB standing at N0.21 billion and N6.38 billion respectively.
For the last quarter of 2019, it noted that, “during the quarter under review, the special and international class of customers made no payment to NBET and MO. The invoice issued to Ajaokuta Steel Co. Ltd (designated as a special customer) and international customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) stood at M29.50 million and N2.07 billion respectively.”
It stated that the challenge of low remittance to the power market has remained a concern to it as one of the main causes of the liquidity crisis facing the power sector.
“Low remittance adversely affects the ability of (the) NBET to honour its financial obligations to Gencos while service providers struggle with the paucity of funds impacting their capacity to perform their statutory obligations.
“The financial viability of NESI is still a major challenge threatening its sustainability. The liquidity challenge is partly due to the non-implementation of cost- reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing.
“The severity of the liquidity challenge in NESI was reflected in the settlement rates of the energy invoices issued by NBET to each of the Discos, as well as the non-payment by the special and international customers,” it noted
