Ajaokuta Steel Risks Power Disconnection Over N5.46bn Debt — NERC

The moribund Ajaokuta Steel Company Limited and its host community risk being disconnected from electricity supply over outstanding obligations of N5.46bn, the Nigerian Electricity Regulatory Commission (NERC) has disclosed.

The disclosure was contained in NERC’s newly released 2025 Annual Report, which showed that Ajaokuta failed to make any payment towards electricity invoices and service charges issued by the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) during the year.

According to the report, the steel company and its host community received an energy invoice of N4.96bn from NBET in 2025 but made no payment. They also failed to settle a N500m service charge issued by the Market Operator.

The unpaid obligations consequently stood at N5.46bn.

“Ajaokuta Steel Co. Ltd and the host community did not make any payment for the N4.96bn and N0.50bn energy invoices and service charges received from NBET and MO, respectively, in 2025,” NERC stated.

NERC Escalates Debt to Federal Government

The electricity regulator said the continued failure to settle the bills had become a concern and had prompted it to escalate the matter to relevant Federal Government ministries for intervention.

NERC warned that failure to resolve the outstanding obligations could ultimately result in the Ajaokuta complex being disconnected from its electricity service providers.

“The commission has escalated the issue of continual non-payment of electricity bills by Ajaokuta to the relevant federal ministries to find a lasting solution.”

The commission added:

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

The warning comes as the Federal Government continues efforts to revive the Ajaokuta Steel Complex, which has remained largely inactive decades after construction began.

Ajaokuta Debt Highlights Wider Power-Sector Challenge

The N5.46bn debt underscores the financial difficulties facing the long-dormant steel complex and highlights a broader challenge within Nigeria’s electricity market: the persistent difficulty in collecting electricity payments from some government-linked institutions and other large power consumers.

For electricity market operators, unpaid obligations can contribute to liquidity pressures across the power value chain, affecting the ability of market participants to meet their own financial commitments.

NERC’s report also revealed varying payment performances among bilateral electricity customers during 2025.

International Customers Record 84.9% Remittance

The commission disclosed that three international bilateral electricity customers — Société Nigérienne d’Électricité, Société Béninoise d’Énergie Électrique and Compagnie Énergie Électrique du Togo — recorded a combined remittance performance of 84.90 per cent during the year.

The customers received a combined invoice of $73.91m for ancillary services provided by the Market Operator.

They subsequently paid $62.75m, leaving a significant portion of the billed amount outstanding.

Local bilateral customers, however, recorded a stronger payment performance.

According to NERC, invoices issued to local bilateral customers for ancillary services provided by the Market Operator amounted to N13.20bn, while payments totalled N12.75bn.

This represented a remittance performance of 96.60 per cent.

What the Ajaokuta Debt Means for the Power Market

The figures highlight the importance of payment discipline across Nigeria’s electricity market, particularly as regulators and market operators continue efforts to improve the sector’s financial sustainability.

NBET serves as an intermediary in Nigeria’s bulk electricity market, facilitating transactions between electricity generators and distribution companies, while the Market Operator administers the commercial operations of the electricity market.

For Ajaokuta Steel, the immediate concern is the growing electricity liability and the possibility of disconnection if the outstanding obligations remain unresolved.

The development also adds another financial hurdle to efforts to restore activity at the decades-old steel complex.

It could be recalled that NERC had issued similar warnings over Ajaokuta’s electricity obligations in the past, although previous threats did not result in corresponding disconnection action.