Benin Republic and Togo Owe Nigeria $8.84 Million in Electricity Debt – NERC Report

The Nigerian Electricity Regulatory Commission (NERC) has disclosed that Benin Republic and Togo owe Nigeria a combined total of $8.84 million for electricity consumed in the fourth quarter of 2024. This revelation comes from NERC’s latest report, which outlines payment remittances made by both domestic and international customers for electricity supplied by Nigerian power Generation Companies (GenCos).

According to the report, six international bilateral customers, including power utilities in Benin and Togo, collectively paid $5.21 million out of a total invoice of $14.05 million. This means that only 37.08 percent of the total debt was settled, leaving a significant shortfall in payments.

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Breakdown of International Customers’ Payments

Among the international electricity customers supplied by Nigerian GenCos, the following payments were made:

• Paras-SBEE (Benin Republic): Paid $2.65 million.
• Paras-CEET (Benin Republic): Paid $1.64 million.
• Transcorp-SBEE (Ughelli) (Benin Republic): Paid $1.71 million out of an invoice of $3.59 million.
• Transcorp-SBEE (Afam 3) (Benin Republic): Paid $0.90 million out of its $1.2 million invoice.
• Odukpani-CEET (Togo): Owes $2.37 million and has yet to make a payment.

Notably, Mainstream-NIGELEC, another international customer, was the only entity that fully settled its invoice, paying $2.60 million without any outstanding balance.

Domestic Electricity Payments and Outstanding Balances

The report also provided insights into domestic electricity customers’ payment performance. Nigerian domestic bilateral customers collectively paid ₦1.25 million out of the total ₦1.98 million invoiced to them. This resulted in a 63.36 percent remittance rate, which is significantly higher than the payment performance of international customers.

Additionally, some international customers attempted to settle part of their past debts. These included:

• Paras-CEET (Benin Republic): Paid an additional $0.98 million.
• Paras-SBEE (Benin Republic): Paid $0.7 million.
• Transcorp-SBEE (Benin Republic): Paid $1.3 million toward past due invoices.

Domestic bilateral customers also made payments toward previous debts, with notable contributions from:

• NDPHC-Weewood: ₦21.17 million.
• North South/Star Pipe: ₦11 million.
• Taopex: ₦83 million.
• Trans-Amadi (OAU/FMPI): ₦20.74 million.

Non-Payment Issues: Ajaokuta Steel Company and Host Community

The report also highlighted a major non-payment issue concerning Ajaokuta Steel Co. Ltd and its host community, which failed to make any payments for their electricity consumption in Q4 2024. The company’s total unpaid invoices amounted to ₦1.27 billion (Nigeria Bulk Electricity Trading, NBET) and ₦0.11 billion (Market Operator, MO).

NERC emphasized that this trend of non-payment has persisted for a long time, urging the Federal Government to intervene and ensure payment compliance. This case has drawn attention due to the critical role Ajaokuta Steel was expected to play in Nigeria’s industrial development.

Revenue Performance of Nigerian Electricity Distribution Companies (DisCos)

Despite the challenges posed by unpaid international and domestic electricity debts, Nigerian electricity distribution companies (DisCos) generated a total revenue of ₦509.84 billion in Q4 2024. This represents 77.44 percent of the ₦658.40 billion billed to customers during the period.

This marks an improvement in revenue collection efficiency, as DisCos had recorded a collection efficiency of 74.55 percent in Q3 2024. In Q3, they collected ₦466.69 billion out of a billed ₦626.02 billion, whereas in Q4, they improved by 2.89 percentage points to reach 77.44 percent efficiency.

NERC noted this progress as a positive sign, indicating a more stable revenue collection system. However, challenges remain, particularly with international customers and special customers like Ajaokuta Steel, which continue to default on payments.

Challenges and Implications of Unpaid Electricity Debts

The inability of some international customers, including Benin Republic’s SBEE and Togo’s CEET, to fully pay for their electricity consumption raises concerns about Nigeria’s energy export strategy. The consistent shortfall in payments means that Nigerian electricity companies struggle to recover the costs of power generation and distribution.

This situation has several implications:

Strain on the Nigerian Electricity Market – Unpaid debts reduce liquidity in the sector, making it harder for DisCos and GenCos to invest in infrastructure improvements.

Potential Supply Disruptions – If non-payment continues, Nigeria may be forced to reconsider supplying electricity to these countries, affecting regional power agreements.

Federal Government’s Role – Authorities may need to renegotiate power supply contracts with Benin and Togo or introduce stricter payment enforcement measures.

Industry experts have suggested that Nigeria should implement stricter financial guarantees for electricity exports, ensuring that international customers make upfront payments before consuming power. This could prevent the accumulation of unpaid debts and improve cash flow in the electricity sector.

The Way Forward for Nigeria’s Electricity Sector

While the NERC report highlights positive developments in domestic electricity revenue collection, the persistent issue of international debts remains a significant concern. The Nigerian government must find ways to ensure that Benin Republic, Togo, and other international customers fulfill their payment obligations to maintain stability in the electricity sector.

Stronger regulatory measures, improved payment enforcement, and a possible review of international electricity contracts may be necessary to address these challenges. Additionally, the continued non-payment by Ajaokuta Steel Company calls for urgent government intervention to prevent further financial losses in the power sector.

As Nigeria seeks to strengthen its energy market, improving payment compliance from both local and international customers will be crucial in achieving a sustainable and financially viable electricity sector.