The Nigerian Electricity Regulatory Commission (NERC) has appealed to the Federal Government to address the persistent issue of non-payment and rising debts within the power sector, particularly from international customers.
NERC, in its latest report for the fourth quarter of 2023, disclosed that 11 electricity Distribution Companies (DisCos) and four international customers failed to remit a total of ₦97.5 billion to the power sector in Q4 2023.
The 11 DisCos withheld ₦81 billion, while international customers—Paras SBEE, Transcorp SBEE, Mainstream NIGELEC, and Odu-Pani-CEET—did not remit $12 million (approximately ₦16.5 billion) as invoiced by the Market Operator (MO).
The report breaks down the debt situation, showing that the DisCos had a cumulative upstream invoice of approximately ₦270 billion for Q4 2023, which included ₦223 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) company and about ₦47 billion for transmission and administrative services by the MO.
However, the DisCos only remitted ₦188.7 billion, leaving an outstanding balance of ₦81 billion, translating to a remittance performance of about 70%, down from 76% in Q3 2023.
The total revenue collected by all DisCos in Q4 2023 was ₦294.9 billion out of ₦399.7 billion billed to customers, resulting in a collection efficiency of 74%, slightly down from the 76% efficiency recorded in Q3 2023.
Furthermore, none of the four international customers made payments against the $12.02 million cumulative invoice for services rendered in Q4 2023, although some payments were made for previous quarters.
The NERC report also noted no payments from bilateral customers against the ₦1.9 million cumulative invoice for Q4 2023. Persistent delays in remittances by international and bilateral customers have led NERC to urge the MO to enforce market rules to address this payment indiscipline.
Furthermore, special customers like Ajaokuta Steel Co. Ltd and its host community did not make any payments towards their ₦0.72 billion (NBET) and ₦0.07 billion (MO) invoices for Q4 2023, continuing a trend of non-payment. NERC has communicated the need for intervention to relevant federal ministries.
The rising debt in the power sector is exacerbated by inadequate power supply, with the country generating only about 5,000 megawatts (MW) despite the grid’s 12,000 MW capacity.
Experts indicate that Nigeria’s population of over 200 million requires at least 30,000 MW for sufficient power supply. Despite the limited power generation, the Transmission Company of Nigeria (TCN) struggles to transmit even the generated 5,000 MW to the DisCos for distribution to end-users.
