By Opeyemi Adelakun
Nigeria’s cross-border electricity business is facing a $28.33m (about N37.44bn) outstanding debt from customers in Benin Republic and Togo over ancillary services provided between 2023 and 2025.
An analysis of annual reports published by the Nigerian Electricity Regulatory Commission (NERC) showed that the debt relates to services associated with the transfer and management of electricity supplied to the neighbouring countries.
The outstanding amount does not represent unpaid bills for electricity generated and consumed by the two countries.
The charges are classified as revenues due to the Market Operator (MO), an entity that was formerly associated with the Transmission Company of Nigeria before the electricity transmission and market operations were unbundled.
NERC’s reports identified three international electricity customers in Niger, Benin and Togo, which collectively incurred $183.5m in ancillary service charges during the three-year period.
The customers are Societe Nigerienne d’electricite (NIGELEC), Societe Beninoise d’Energie Electrique (SBEE) and Compagnie Energie Electrique du Togo (CEET).
Of the total $183.5m billed, the companies paid $155.17m, leaving an accumulated balance of about $28.33m.
In 2023, the three utilities were billed $53.55m and paid $50.36m, resulting in a $3.19m balance.
The amount billed increased to $56.04m in 2024, while payments fell to $42.06m, leaving $13.98m unpaid.
By 2025, the combined bill had risen to $73.91m. The utilities paid $62.75m, leaving another $11.16m outstanding.
The NERC figures show that Togo’s CEET accounts for the overwhelming majority of the outstanding balance.
CEET was billed $50.38m during the period but paid only $23.5m, leaving an unpaid balance of $26.88m.
This represents about 95 per cent of the total debt accumulated by the three international customers.
SBEE, the Beninese utility, was billed $46.18m and paid $44.71m, leaving $1.47m outstanding.
NIGELEC, meanwhile, was billed $44.84m but paid $44.85m. The slight excess payment may have been used to offset obligations predating the period covered by the reports.
Expert Explains Nature Of Charges
Tobi Oluwatola, a partner at AP3 Advisory Services and chief executive of TAO Technologies, said the outstanding amount represents a residual service charge covering regulated market-related functions.
According to him, the charge covers the regulator, transmission company, bulk trader, market operator and system operator, with the combined service cost running at around $20m per quarter.
He explained that the actual cost of electricity, including energy and capacity charges for the roughly 350 megawatts supplied to the neighbouring countries, is handled separately.
“The number in the news is the small administrative slice of the trade, and it happens to be the one layer not yet fully behind a guarantee. The neighbours pay this slice to the generating companies, alongside their energy and capacity charge; it is the generating company that pays the market operator.”
Oluwatola said payment arrangements for electricity supplied to international customers had already been addressed through the Eligible Customer reforms introduced in 2017 and the Willing Buyer, Willing Seller framework of 2019.
He added that cross-border electricity transactions were subsequently placed under direct bilateral arrangements between neighbouring utilities and Nigerian generating companies.
“To buy power this way, a customer must post a letter of credit or a bank guarantee to the market operator before a single megawatt flows. That is precisely why the energy trade with our neighbours works: it was designed to be commercially disciplined, and it runs on surplus capacity, not on power taken from Nigerian homes, and is capped at less than 10 per cent of the power on the grid.”
On the outstanding service charges, he said the system operator was working towards securing the payments in the same manner as the energy contracts.
He noted that where payments are delayed, the issue could be linked to older government-associated plants operating under legacy arrangements rather than a straightforward case of foreign default.
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