Ajaokuta Steel risks power cut over N5.46bn debt

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

The NERC, in its just-released 2025 Annual Report, said the steel company and the host community failed to make any payment towards energy invoices and service charges issued by the Nigerian Bulk Electricity Trading Plc and the Market Operator during the year.

According to the report, Ajaokuta received an energy invoice of N4.96bn from NBET in 2025 but made no payment. It also failed to pay the N500m service charge invoice issued by the Market Operator, bringing the total outstanding obligation to 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,” the commission said.

NERC said the continued non-payment had become a matter of concern, prompting it to escalate the issue to relevant Federal Government ministries for intervention.

It warned that failure by Ajaokuta to settle its electricity obligations could put the complex at risk of being disconnected by its 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.

“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,” NERC stated.

The disclosure comes amid the Federal Government’s renewed efforts to revive the Ajaokuta Steel Complex, which has remained largely inactive decades after its construction began.

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The electricity debt highlights the financial challenges confronting the complex and the wider difficulties surrounding the payment of electricity bills by some government-linked institutions and other large power consumers.

NERC also disclosed that international bilateral electricity customers recorded a lower remittance performance in 2025 compared with their local counterparts.

The international customers – Société Nigérienne d’Électricité, Société Béninoise d’Énergie Électrique and Compagnie Énergie Électrique du Togo – received a combined invoice of $73.91m for ancillary services provided by the Market Operator.

The three international customers paid $62.75m, representing an 84.90 per cent remittance performance.

For local bilateral customers, NERC said invoices 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.

The commission’s report underscores the growing pressure on electricity market participants to meet their financial obligations, as unpaid bills continue to affect the liquidity and sustainability of the Nigerian Electricity Supply Industry.

NBET is responsible for bulk electricity trading and serves as an intermediary between electricity generators and distribution companies, while the Market Operator administers the commercial operations of the electricity market.

For Ajaokuta, however, it could be recalled that NERC had issued similar threats in the past without corresponding actions.