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TCN confirms discussions with West African neighbours to clear outstanding power debts




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THE Transmission Company of Nigeria (TCN), on Wednesday, said discussions were underway for the clearance of outstanding debts owed by some West African neighbours to some power generation companies.

General Manager of Market Operations of the TCN Edmund Eje confirmed the development to The ICIR.

Recall, the Nigerian power generation companies (GenCos) supplies power to some of Nigeria’s neighbours such as Togo, Benin and Niger Republic, with payment made under bi-lateral agreements.

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“Most of them are on bi-lateral agreements with some of the generation companies since we privatised our power sector. They have already contacted us for proper auditing and have expressed readiness to clear the arrears owed, ” Eje explained.

Sule Ahmed Abdulaziz
Sule Ahmed Abdulaziz, the Managing Director, Transmission Company of Nigeria
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He noted that following Nigeria’s power privatisation, some of the West African neighbours engaged some GenCos directly through power purchase agreements.

“For instance, Benin Republic engages Mainstream Energy, ” he said.

A Power Sector Governance Expert and Energy Lawyer Chuks Nwani told The ICIR that through the West Africa power pool, each country contracted some power sector value chain players for its electricity needs and had an understanding of how to make payment through bi-lateral agreement.

“Para Energy has been selling power to Benin Republic from Ogun state,” he said.

Nigeria still struggles to address liquidity concerns in the power sector with a monthly subsidy of N30 billion. The government has, however, hinted of plans to drop such subsidy in 2022.

The Nigerian Electricity Regulatory Commission (NERC) disclosed in its Second Quarter Report 2021 that three West African countries owed Nigeria for electricity supplied to them.

The regulatory agency noted that the power firms of the three nations and some other special customers were issued a total bill of ₦770 million (approx. $1.87 million) by the Nigerian Bulk Electricity Trading company (NBET) and the market operator (MO) of the TCN.

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The NERC noted, however, that nothing was paid by the neighbouring countries and other special customers for the power supplied to them from Nigeria during the period.

The neighbouring countries’ power firms, according to NERC, included: Societe Nigerienne d’electricite – NIGELEC, in Niger Republic; Societe Beninoise d’Energie Electrique – SBEE, in Benin Republic; and Compagnie Energie Electrique du Togo- CEET, in Togo Republic.

The report read: “During the quarter under review, NBET and MO issued a total of ₦77 million in respect of energy sold by NBET and services rendered by MO to the special (Ajaokuta Steel Co. Ltd and other bilateral customers) and international customers (Societe Nigerienne d’electricite – NIGELEC, Societe Beninoise d’Energie Electrique – SBEE and Compagnie Energie Electrique du Togo- CEET).

“No payment was made by these customers during the quarter under review. It is hoped that as the economies of these customers improve post-COVID-19 lockdown, they will resume the settlement of their bills in full.”

The commission, while reviewing the performance of distribution companies (DisCos), with respect to the payment of electricity sold to them by the NBET, stated that the firms did not pay up all their bills.

According to the regulator, “During the second quarter of 2021, a total invoice of ₦259.7 billion (approx. $631.9 million) was issued to the eleven discos for energy received from the Nigerian Bulk Electricity Trading Plc and for service charge by MO, out of which a sum of ₦130.11 billion (approx. $316.6 million) was settled, representing remittance performance of 50.11 per cent.

“This represents a 1.78 per cent-point decrease from the final settlement rate recorded in the first quarter of 2021.”

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The NERC stated that apart from Eko DisCo, none of the other DisCos met their expected minimum remittance thresholds to NBET in the quarter under review.

It stated that over all, the total disco remittance to NBET was 76 per cent of expected total for the quarter, as the average aggregate remittance performances to market operator and NBET decreased by 1.78 percentage points, from 51.88 per cent in first quarter 2021 to 50.1 per cent in the second quarter.

“Discos remittance performance level ranged from 10.51 per cent (Yola) to 63.69 per cent (Eko) for NBET and 28.76 per cent (Yola) to 99.88 pee cent (Eko) for MO,” the NERC stated.

“Ikeja recorded zero remittance to MO in the months of May and June 2021 as they wait to resolve a service level agreement dispute.”

The report stated that the total billing to and collection from electricity consumers by all the 11 Discos stood at ₦268.97 billion ($654.6 million) and ₦185.29 billion ($450.9 million) respectively during the quarter under review, implying a collection efficiency of 68.89 per cent.”

NERC said the level of collection efficiency indicated that as much as ₦3.11 out of every ₦10 worth of energy sold during the second quarter of 2021 remained uncollected from consumers.

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