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NERC: Ajaokuta steel plant may be disconnected over N25bn debt

NERC: Ajaokuta steel plant may be disconnected over N25bn debt
October 17
12:25 2023

The Nigerian Electricity Regulatory Commission (NERC) says the Ajaokuta Steel Company Limited may suffer disconnection from the national grid over gross indebtedness of N25.06 billion.

The debt is contained in the 2022 annual report of the NERC.

The commission warned that failure to settle the obligation may put the Ajaokuta complex and its host community at risk of being disconnected by its service providers — Nigerian Bulk Electricity Trading (NBET) Plc and market operator (MO).

 In 2022, the NESI also supplied electricity to one special customer – Ajaokuta Steel Co. Ltd and the host community,” the statement reads.

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“Unfortunately, the customer continued the same pattern of non-payment as it exhibited 2021 with N0 paid against the Nigerian Electricity Regulatory Commission N1.39 billion and N0.27 billion invoices received from NBET and MO respectively in 2022. 

According to NERC, the MO and NBET must activate the relevant safeguards against continued non-settlement of market obligations by the market participants.

“No payment was made by the special customers (Ajaokuta Steel Co. Ltd and the host community) in respect of the N1.39 billion and N0.27 billion energy invoices and service charges received from NBET and MO respectively,” NERC said. 

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“The total debt obligation of Ajaokuta to NBET and the MO as at 31st December 2022 stands at N22.98 billion and N2.08 billion respectively.

“The issue of Ajaokuta has been a pressing one for the Commission and engagements have been held with the responsible federal ministries to find a lasting solution to the non-payment of its electricity bills.

“Failure to settle the obligations may put the Ajaokuta complex at the risk of being disconnected by its service providers (NBET and MO) on the grounds of gross indebtedness.”

The debt, NERC said, comprises an outstanding invoice of N8.62 billion and accrued interest of N14.36 billion as at December 2022.

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