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The federal government has netted off 97 per cent of the over ₦2.6 trillion debt owed by the DisCos to the federation account and Nigerian electricity market and service providers.
This was disclosed during the engagement with the DisCos at the weekend by a five-man debt-recovery committee set up by the Federal Government.
In a statement, NISO said that the engagement provided an opportunity for the operator to review the outstanding market obligations of the DisCos and examine payment arrangements aimed at addressing balances that have continued to impede the effective functioning and development of the Nigerian Electricity Market.
Following the deliberations, the payment proposals presented by some of the DisCos were considered unacceptable to NISO at the hearing, particularly in view of the magnitude and age of the outstanding obligations.
The hearing, conducted by the committee chaired by the Executive Director, Market Operations, Engineer Edmund Eje, expressed concern over the proposed payment frameworks presented by some DisCos for the liquidation of their outstanding market obligations.
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The committee noted that the Federal Government had magnanimously netted off approximately 97 per cent of the DisCos’ outstanding obligations for the period 2015–2020 and, consequently, stressed the need for the affected DisCos to take immediate steps towards liquidating their remaining balances.
NISO, according to the chairman of the committee, will therefore proceed with the next steps, including the application of sanctions as provided under the Market Rules, while maintaining its commitment to constructive engagement, transparency and due process.
“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,” NISO said.
Recall that the DisCos are facing a massive financial crisis, with an outstanding debt of ₦2.6 trillion owed to the federation account and deep-seated sector-wide liabilities.
The heavily indebted DisCos are 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).
