Ajaokuta Steel, foreigners owe power sector N12.2 billion

Ajaokuta Steel, foreigners owe power sector N12.2 billion
Ajaokuta Steel Plant

The Ajaokuta Steel Company and other international customers owe the power sector N12.2b, according to the 2018 first quarter report of the Nigerian Electricity Regulatory Corporation (NERC).

NERC disclosed yesterday that in the period under review, invoices issued to foreign customers (CEB/SAKETE and NIGELEC) and special customer (Ajaokuta) stood at N12.2b, but payments were not received from the customers.

The commission said the Federal Government has continued to engage governments of neighbouring countries to ensure payments for electricity they bought.

“Financial illiquidity remains the most significant challenge affecting the industry’s sustainability.

This liquidity challenge is partly attributed to non-cost-reflective tariffs and high technical and commercial losses aggravated by consumers’ apathy to payment arising from estimated billing and poor quality of supply in most load centres,” it said.

Out of the N171.1b billed customers in the first quarter of 2018, only N106.6b was recovered, representing 62.3 per cent collection efficiency, the report clarified.

Therefore, out of every N10 worth of electricity sold during the quarter under review, N3.8 was uncollected.

The liquidity challenge in the sector was further reflected in the power distribution companies (DisCos)’s remittances relative to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operator’s invoices.

“In the first quarter of 2018, whereas the DisCos were issued N163.1b invoices for energy received from NBET and service charge by MOs, the Discos settled only N51.2b or 31.4 per cent, creating a shortfall of N112b,” it said.

As stated in the 2017 Q4 report, resolving these constraints remains a top priority, the commission said, adding that it has started executing the actionable items identified in its 2017.

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