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From Isaac Anumihe, Abuja
The federal government has netted off about 97 per cent of the over N2.6 trillion debt owed by electricity Distribution Companies (DisCos) to the federation account, the Nigerian electricity market and service providers.
This leaves approximately N78 billion to be settled by the affected companies.
This was disclosed during an engagement with the DisCos at the weekend by a five-man debt-recovery committee set up by the Federal Government.
The engagement, according to the Nigerian Independent System Operator (NISO), provided an opportunity to review the outstanding market obligations of the DisCos and examine payment arrangements for settling balances that have continued to impede the effective functioning and development of the Nigerian electricity market.
The committee, chaired by NISO’s Executive Director, Market Operations, Engineer Edmund Eje, expressed concern over payment proposals submitted by some of the DisCos, describing them as unacceptable given the size and age of their outstanding obligations.
The committee noted that the Federal Government had already netted off approximately 97 per cent of the DisCos’ outstanding obligations for the period between 2015 and 2020.
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It consequently urged the affected DisCos to take immediate steps to settle their remaining balances.
According to NISO, the committee will proceed with the next steps, including the application of sanctions provided under the market rules, while maintaining its commitment to constructive engagement, transparency and due process.
NISO said, “The engagement underscores the critical importance of market discipline, compliance and accountability among market participants, as well as continued collaboration in strengthening market confidence and ensuring the sustainability and effective functioning of the Nigerian electricity market.”
The development comes amid the financial challenges confronting Nigeria’s electricity distribution companies, with the DisCos carrying outstanding liabilities estimated at over N2.6 trillion.
The DisCos with significant outstanding obligations include Benin Electricity Distribution Company (BEDC), Enugu Electricity Distribution Company (EEDC), Ibadan Electricity Distribution Company (IBEDC), Jos Electricity Distribution Company (JEDC), Kaduna Electricity Distribution Company (KAEDCO), Port Harcourt Electricity Distribution Company (PHEDC) and Kano Electricity Distribution Company (KEDCO).
The committee’s action is expected to intensify pressure on the affected DisCos to meet their remaining financial obligations and comply with the rules governing the Nigerian Electricity Market.
