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Nigeria’s international electricity customers in Togo and Benin Republic have accumulated a debt of 37.44 billion Nigerian naira (approximately 28.33 million U.S. dollars) for ancillary services supplied over a three‑year period, according to annual reports released by the Nigerian Electricity Regulatory Commission (NERC) for 2023, 2024 and 2025.
The debt relates to services used to transfer electricity from Nigerian generation plants to the state‑owned utilities of the two countries, rather than payment for the electricity itself. The charges are classified as belonging to the Market Operator (MO), the term formerly used for the Transmission Company of Nigeria before its unbundling.
Across the three years, the total bill for ancillary services amounted to 183.5 million U.S. dollars. The utilities that receive power from Nigeria are the Societe Nigerienne d’Electricité (NIGELEC) in Benin, the Societe Beninoise d’Energie Electrique (SBEE) in Benin, and the Compagnie Energie Electrique du Togo (CEET) in Togo.
Payments made by the utilities were as follows:
- 2023: billed 53.55 million U.S. dollars, paid 50.36 million, leaving an outstanding balance of 3.19 million.
- 2024: billed 56.04 million U.S. dollars, paid 42.06 million, leaving an outstanding balance of 13.98 million.
- 2025: billed 73.91 million U.S. dollars, paid 62.75 million, leaving an outstanding balance of 11.16 million.
By utility:
- NIGELEC was billed 44.84 million U.S. dollars and paid 44.85 million, effectively clearing its debt and possibly settling earlier arrears.
- SBEE was billed 46.18 million U.S. dollars and paid 44.71 million, leaving a balance of 1.47 million.
- CEET was billed 50.38 million U.S. dollars and paid 23.5 million, leaving an outstanding balance of 26.88 million. This represents 95 percent of the total debt owed during the period, with the remaining 5 percent attributable to Benin.
Speaking on the debt, Tobi Oluwatola, partner at AP3 Advisory Services and chief executive of TAO Technologies, explained that the payment is a residual service charge that covers the regulator, the transmission company, the bulk trader and the market and system operator. He noted that the value of the electricity itself, the energy and capacity for the roughly 350 megawatts supplied, is settled separately under guaranteed contracts and is larger than the ancillary service charge.
Oluwatola added that cross‑border and large‑industrial electricity supply is now conducted through direct, guaranteed bilateral contracts between neighbouring utilities and Nigerian generating companies. He said that to buy power in this way, a customer must post a letter of credit or a bank guarantee to the market operator before any electricity is transmitted.
He further stated that the system operator is moving to secure its service charges in the same manner as the energy contracts, and that any outstanding balances are usually associated with older government‑linked plants on legacy terms, rather than foreign defaults.
These developments highlight the ongoing adjustments in Nigeria’s cross‑border electricity trade framework and the financial obligations of its neighbouring utilities.
Article source: allafrica.com | Image credit: Daily Trust
