Nigeria’s Electricity Market Battles Rising Debt as Foreign Buyers Pay only 28% of Power Bills in Q1 2026
By Eyo Nsima
Nigeria’s electricity market continued to grapple with mounting payment challenges in the first quarter of 2026, with international bilateral electricity customers remitting barely a quarter of their invoices, while the Federal Government-owned Ajaokuta Steel Company sustained its longstanding record of non-payment, according to the Nigerian Electricity Regulatory Commission (NERC).
The Commission’s First Quarter 2026 Report showed that although domestic bilateral customers maintained a strong payment culture, weak remittances from international buyers and persistent defaults by special customers continued to undermine liquidity in the Nigerian Electricity Supply Industry (NESI).
International customers pay only 27.6%
The report indicated that the three international bilateral customers supplied by Nigerian generating companies received invoices totaling $17.48 million from the Market Operator (MO) during the first quarter of 2026.
However, they paid only $4.82 million, representing a remittance performance of 27.57 per cent.
The poor payment performance means that more than 72 per cent of electricity supplied to the foreign customers during the quarter remained unpaid, adding pressure to the cash flow of Nigeria’s electricity market.
Among the international customers
Mainstream–NIGELEC (Niger Republic) recorded the strongest performance, paying $2.79 million out of $4.45 million, equivalent to 62.7 per cent.
Transcorp–SBEE (Afam 3) remitted $1.13 million from an invoice of $2.90 million, representing 38.97 per cent.
Transcorp–SBEE (Ughelli) paid only $0.90 million out of $4.20 million, translating to 21.43 per cent.
Paras–SBEE and Odukpani–CEET made no payments during the quarter despite receiving invoices.
Paras–CEET also failed to settle its $1.67 million invoice.
The figures underscore the persistent challenge of collecting payments for electricity exported to neighbouring West African countries despite growing regional electricity trade.
Old debts begin to trickle in
Despite the weak current-quarter performance, NERC noted that several international customers made payments towards outstanding invoices accumulated from previous quarters.
During the first quarter, the Market Operator received $6.64 million in debt repayments from international bilateral customers.
The payments included:
$4.05 million from Société Béninoise d’Energie Electrique (SBEE), comprising $3.28 million for electricity supplied from Ughelli and $0.77 million for Paras.
$1.87 million from Société Nigérienne d’Electricité (NIGELEC).
$0.72 million from Compagnie Energie Electrique du Togo (CEET) for electricity supplied through Paras.
While these repayments improved cash recovery, they were insufficient to offset the growing stock of unpaid invoices.
Domestic bilateral customers record impressive performance
In contrast to the international market, domestic bilateral customers posted a much stronger payment performance.
According to NERC, domestic bilateral customers paid ₦5.82 billion out of invoices totaling ₦6.12 billion, representing an impressive 95 per cent remittance performance.
Several customers achieved full payment, including:
Mainstream/Inner Galaxy
North South/Star P
NDPHC/Sunflag
Sapele/Phoenix
Zungeru/Youngxing
Mainstream/PHEDC
Mainstream/JEDC
Mabon/KEDCO
NDPHC/Orashi
Mainstream/MBELT EKEDC
Others, however, recorded partial or zero payments.
For instance, Taopex/KAM International paid 60.23 per cent, Omotosho II/Pulkit remitted 72.07 per cent, Trans Amadi (FMPI) settled 64.09 per cent of its invoice, Weewood, Trans Amadi (OAU) and Alaoji/APLE failed to make any payments during the quarter.
In addition, nine domestic bilateral customers collectively paid ₦2.59 billion toward debts carried over from previous quarters, demonstrating gradual efforts to reduce outstanding liabilities.
Ajaokuta Steel remains chronic debtor
Perhaps the most striking finding in the report is the continued non-payment by the Ajaokuta Steel Company Limited and its host community.
NERC disclosed that the special customer failed to pay both:
₦676.88 million invoiced by the Nigeria Bulk Electricity Trading Plc (NBET); and
₦189.38 million invoiced by the Market Operator.
This represents a zero per cent payment performance.
The Commission described the default as part of a longstanding pattern of non-payment and revealed that it has repeatedly called on the Federal Government to intervene.
“The special customer (Ajaokuta Steel Co. Ltd and the host community) did not make any payment towards the ₦676.88 million (NBET) and ₦189.38 million (MO) invoices received in 2026/Q1. This continues a longstanding trend of non-payment by this customer, and the Commission has communicated the need for intervention on this issue to the relevant FGN authorities,” the report stated.
Liquidity challenge persists
The latest figures reinforce the liquidity constraints facing Nigeria’s electricity market.
While domestic bilateral customers have demonstrated significant improvement in payment discipline, poor remittances from international electricity buyers and chronic defaults by some government-backed customers continue to reduce available cash across the electricity value chain.
Industry analysts say inadequate collections ultimately affect generating companies, transmission operations and electricity distribution companies, limiting investments in infrastructure, maintenance and expansion of electricity supply.
The report suggests that improving debt recovery, enforcing contractual payment obligations and resolving the persistent liabilities of special customers such as Ajaokuta Steel remain critical to strengthening the financial sustainability of Nigeria’s electricity market.
As Nigeria pursues reforms aimed at creating a more competitive and financially viable electricity sector, addressing these outstanding debts will be essential for improving investor confidence, enhancing market liquidity and ensuring reliable power supply across the country.
