A Review of the Nigerian Energy Industry

Govt’s debt to power companies reaches N31bn

…Military owes 50% of all debts

Oscarline Onwuemenyi 17 August 2015, Sweetcrude, Abuja – Debts owed to six electricity Distribution Companies, Discos, in‎ unpaid electricity bills ‎ by Ministries, Departments and Agencies, MDAs, of the Federal Government and some state governments since November 2013 may have hit N31 billion, investigation has revealed.

Power4The Nigerian Electricity Bulk Trading Company, NBET, had given the 11 Discos deadline to pay their balance for power supply by the generation and transmission companies in the last three months. But the Discos had said they are also owed huge sums by customers.

It was gathered that the Discos have been under intense pressure following the crippling debt owed by consumers, especially government agencies, since the core investors took charge of the assets in November 2013.

Some of the Discos decried the rising debt, lamenting that their resolve to inject funds into and improve the network is being threatened by the debts.‎

Checks on the debt profiles of electricity customers across six Discos, however, revealed that the Ministry of Defence, including military formations and the paramilitary alone owe over N15.5 billion to some of the power companies.

Some of the Discos affected include Abuja Electricity Distribution Company, AEDC, Kaduna Electric, KE, Kano Electricity Distribution Company, KEDC, and Eko Electricity Distribution Company, EKEDC. Others are Benin Electricity Distribution Company, BEDC, and Ibadan Electricity Distribution Company, IBEDC.

An advocacy and Research expert, Sunday Oduntan, who decried the huge debt profile of growing firms said: “What President Muhammadu Buhari promised voters is that there will be a change. He needs to talk to his people from the State House to the state governments to pay their bills. There are provisions for utilities in the budget of agencies, since they are not paying the bills, what then happens to the money?”

A breakdown of the debts showed that Abuja Disco is owed N7.1bn with the Ministry of Defence owing a larger chunk of N3.6bn. The military again is the highest debtor as shown in Kaduna Electric’s debt books with over N5.7bn, while the Police, other paramilitary outfits and state MDAs owe over N980m. Its entire debt from public institutions stands at N6.7bn.

Ibadan Disco is owed N5.2bn by the federal and state MDAs. While the military owes N3.9bn, others owe the balance of N1.2bn. Meanwhile, Kano Disco is owed over N860m with the state and other MDAs owing N560m and military formations N260m. Eko Disco is owed N2.3bn with the Police, federal and the state government owing over N400m, while military formations owe N1.9bn.

Details of debts being owed the other five Discos comprising Port Harcourt, Ikeja, Enugu, Yola and Jos are yet to be accessed. However, it could see the debt toll rise significantly.

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