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Nigeria exports $81.48 billion worth of electricity on credit as country’s blackout persists

Over the past two years, three neighboring countries have purchased electricity from Nigeria for a total of $81.48 billion, despite the fact that many households and businesses in the country continued to suffer from power outages.

Invoices issued to the republics of Togo, Niger and Benin for electricity supplied to them from Nigeria in 2018 and 2019 totaled $81.48 billion, an analysis of data obtained by the Nigerian electricity regulatory Commission showed.

Niger bought $ 26.03 billion worth of electricity over a two-year period, while Togo and Benin imported $55.45 billion worth of electricity from Nigeria.

The country’s electricity production has fluctuated between 3,000 megawatts and 4,500 MW over the past few years, despite the privatization of the sector in 2013.

The national network continued to suffer from a systemic collapse over the years due to the lack of spinning reserves that were supposed to prevent such cases. Between November 1, 2013 and may 2020, 83 total power system collapses were recorded, while the network partially collapsed 25 times.

However, Nigeria sells electricity through some of its power plants to neighboring countries that are classified as international consumers.

The Nigerian energy company Societe Nigerienne d’electricite received a total electricity bill from Nigeria in the first quarter of 2019 for the amount of N3. 01bn; N3.69bn in the second quarter; N4.1bn in the third quarter; and N2.07 in the fourth quarter.

In 2018, NIGELEC received a bill of $ 2.89 billion in the first quarter; $3.56 billion in the second quarter; $3.63 billion in the third quarter and $3.08 billion in the fourth quarter.

Communaute Electrique du Benin, an energy company owned by Togo and Benin, received a total bill of N9.74bn for electricity delivered to it in the first quarter; N7.16bn in the second quarter; and N2.27bn in the third quarter, but none in the fourth quarter.

In 2018, CEB received an invoice of $9.04bn in Q1; $9.44bn in Q2; $8.48bn in Q3; and $9.32bn in Q4.

According to NERC’s quarterly reports, the international customers did not make any payments in each of the four quarters of 2019.

“During the quarter under review, the special and international class of customers made no payment to the Nigerian Bulk Electricity Trading Plc and the Market Operator,” NERC said in its fourth-quarter report.

“The Federal Government has continued to engage the governments of neighbouring countries benefitting from the export supply to ensure timely payments for the electricity purchased from Nigeria,” the regulator added.

The total amount of electricity generated by power plants on the national grid as of 6am on Saturday stood at 3,219MW, according to the Nigerian Electricity System Operator.

Nine of the 27 power plants did not generate any megawatts of electricity as of 6am on Saturday, with 2021.7MW generation capacity left unused.

The system operator put the nation’s installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.

“Among households, electricity access is still limited in Nigeria (around 56 per cent). Yet, access is often unreliable since electricity supply suffers from frequent outages,” the World Bank said in a recent report.

The report noted that rural areas were particularly hit by blackouts, where number of interruptions in supply were almost double of that in urban areas.

It said, “Electricity is reported to be a major constraint by businesses. Around 27 per cent of enterprises identify electricity as the main obstacle to doing business, which is more than twice the sub-Saharan Africa average.

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“For business consumers, improved reliability of power will reduce losses due to outages, and reduce expenditure on alternative sources of energy.”

A former Managing Director of the Transmission Company of Nigeria, Mr Usman Mohammed, told our correspondent recently that power supply to Benin and Togo was disconnected in October 2019 because of the non-payment of the outstanding debt.

According to him, the amount of electricity being sold to international customers is around 300 megawatts, with Togo being supplied by Calabar Power Plant; Benin by Paras Energy & Natural Resources Development Limited; and Niger by Mainstream Energy Solutions Limited.

The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers, while the Market Operator is an arm of the TCN.

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According to NERC, the financial viability of the Nigerian electricity supply industry is still a major challenge threatening its sustainability.

It said, “As highlighted in the preceding quarterly reports, the liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing.”

It added that the severity of the liquidity challenge in the industry was reflected in the settlement rates of the energy invoices issued by NBET to each of the Discos, as well as the non-payment by the special and international customers.

Globalgistng Nigeria


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