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Wednesday, 25 March 2020

The Nigerian Electricity Regulatory Commission (NERC) has announced that the republics of Togo, Niger and Benin owe Nigeria a total of N29.97bn for the electricity supplied to them from January to September last year.

Earlier in December, the Transmission Company of Nigeria (TCN) had warned the power firm of Niger Republic, Societe Nigerienne Electricite and another company, Communaute Electrique du Benin, owned jointly by Benin and Togo about the need to pay up to avoid disconnection.

Nigeria supplies power to the three countries through TCN in compliance with decades-old agreements reached between Nigeria and the three countries to prevent them from damming the River Niger, in order to sustain flow of adequate water to Nigeria’s Kainji Dam.

But over the years, the three countries have requested more megawatts of energy than the original agreement demanded, thus creating a trade in power across borders between Nigeria and the three countries.

For many years, Nigeria has supplied about 300MW daily to the three countries combined. It is, therefore, bad news that the two companies with international business experience have chosen to withhold payment on supplies that they had sold to customers.

It is also surprising that failure to pay for electricity by these countries has been on and off since 2018 or much longer. Usman Mohammed, managing director of TCN and chairman of the West African Power Pool, confirmed this recently: “When I took over as MD TCN, both Benin and Togo, were owing Nigeria more than $100 million….As at now, we have restricted their supply to only their contracted ones.

We are insisting they pay all their outstanding bills before we reconnect them and we increase the off-take.” If disconnections have already been made in the three countries, then they should remain in effect until each country fulfills its obligations.

The three countries ought to show more sensitivity to the concerns of Nigeria. Despite its own economic and power problems, Nigeria’s Transmission Company has acted in good faith and with a high sense of good neighborliness by giving several months of grace to the two  international electricity companies, even at a time that millions of Nigerian citizens do not have access to electricity.

The two companies in Niger and Benin/Togo have been in business long enough to know the implications of failing to meet contractual obligations. They therefore deserve to be reminded that provision of power is not a charity. There is no reason for the companies to ignore the warning given to them last December about overdue payments.

There is no better time for TCI to encourage the federal government to seek diplomatic intervention. First, a government-to-government discussion is necessary before TCI terminates transmission of power to the three countries.

Second, the matter deserves to be brought before relevant ECOWAS agency for arbitration should the federal government’s discussion with each of the three governments fail.

Now that the West African Power Pool project on a region-wide power integration system is near completion is not the time for companies in any part of the region to default in payment for power supplied to them by other companies within ECOWAS.

The federal government needs to remind the governments of Niger, Togo, and Benin that power transmitted to their electricity companies should be treated not as aid but as trade guided by international laws. Nigeria’s neighbors ought to understand that Nigeria needs to pay its own bills, if it is to remain in good financial standing with the countries it trades with.

Nigeria itself needs to pursue more vigorously other sources of power, such that it can choose international power countries to sell power to, without feeling tied to a twenty-year-old deal for damming a river common to many countries in West Africa.

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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