Nigeria: Benin, Togo Owe $28.33M for Electricity Services Debt

• Benin and Togo collectively owe Nigeria $28.33 million (N37.44 billion) for ancillary electricity services rendered between 2023 and 2025.
• This debt, identified in Nigerian Electricity Regulatory Commission (NERC) reports, is for administrative and transmission services, not the direct cost of electricity supplied.
• Togo's state utility, CEET, is responsible for 95% of the outstanding amount, totaling $26.88 million, while Benin's SBEE owes $1.47 million.
• Expert analysis indicates that while payments for the electricity itself are secured by guarantees, these ancillary service charges lack similar full backing, posing a collection risk.
• The Nigerian Independent System Operator (NISO), to whom these fees are due, is actively working to implement security measures for these administrative payments.

Crucially, unlike the primary energy payments, these administrative charges are not yet fully backed by guarantees, presenting a distinct collection challenge.

Nigeria's international electricity customers, specifically the Republics of Benin and Togo, have accumulated a significant outstanding balance of $28.33 million, equivalent to N37.44 billion, for ancillary electricity services provided over a three-year period. This debt, spanning from 2023 to 2025, is distinct from the cost of the electricity itself; instead, it covers the essential services required to transmit power from generation facilities to the respective state electricity companies in these nations.

According to an analysis of annual reports published by the Nigerian Electricity Regulatory Commission (NERC), these funds are due to the Nigerian Independent System Operator (NISO), which assumed the functions of the Market Operator following the unbundling of the Transmission Company of Nigeria (TCN) in April 2024. Over the three-year period, Nigeria's three international customers—Benin, Niger, and Togo—were collectively billed $183.5 million for these services. Of this total, $155.17 million has been paid, leaving the $28.33 million outstanding.

The annual breakdown reveals a fluctuating debt pattern. In 2023, the total bill amounted to $53.55 million, with $50.36 million paid, resulting in an outstanding balance of $3.19 million. The following year, 2024, saw a bill of $56.04 million, but only $42.06 million was remitted, increasing the outstanding amount to $13.98 million. By 2025, the billed amount rose to $73.91 million, with $62.75 million paid, leaving a further $11.16 million unpaid.

A closer examination of the individual contributions to this debt highlights significant disparities among the international customers. The state-owned utility companies involved are Societe Beninoise d'Energie Electrique (SBEE) for Benin, Compagnie Energie Electrique du Togo (CEET) for Togo, and Societe Nigerienne d'electricite (NIGELEC) for Niger, which was fully nationalized by the Nigerien government in June 2025.

During the 2023-2025 period, NIGELEC in Niger was billed a total of $44.84 million and notably paid $44.85 million, slightly exceeding its billed amount, potentially to cover prior outstanding balances. In contrast, SBEE in Benin was billed $46.18 million but paid $44.71 million, leaving an outstanding balance of $1.47 million. The most substantial portion of the debt is attributed to CEET in Togo, which was billed $50.38 million but remitted only $23.5 million, resulting in a significant outstanding balance of $26.88 million.

This means that Togo's CEET is responsible for a staggering 95% of the total $28.33 million in Nigeria cross-border power arrears, with Benin's SBEE accounting for the remaining 5%.

Tobi Oluwatola, CEO of TAO Pan African Energy (also known as TAO Energy), provided critical insight into the nature of this debt. He explained that the outstanding amount represents a 'residual service charge' or 'administrative slice.' These are regulated fees that cover the costs of various entities within the electricity sector, including the regulator, the transmission company, the bulk trader, and the market and system operator. These charges typically amount to approximately $20 million per quarter.

Crucially, this administrative component is distinct from the much larger payments for the electricity itself, which covers the energy and capacity for roughly 350 megawatts supplied. Payments for the actual power are settled separately under guaranteed contracts. Oluwatola emphasized that while the primary energy payments are robustly secured, this 'administrative slice' is the one layer not yet fully behind a guarantee. Neighboring countries pay this fee to the generating companies (Gencos), who are then responsible for remitting it to the Nigerian Independent System Operator (NISO).

The mechanism for payment for the electricity generated and supplied to international customers is already well-established and secured. Reforms such as the Eligible Customer framework of 2017 and the Willing Buyer, Willing Seller framework of 2019 have moved cross-border and large-industrial electricity supply onto direct, guaranteed bilateral contracts between neighboring utilities and Nigerian Generating Companies (Gencos).

Under these arrangements, a customer is required to post a letter of credit or a bank guarantee with the Nigerian Independent System Operator (NISO) before any electricity is supplied. This commercially disciplined system ensures the reliability of energy trade, utilizing Nigeria's surplus capacity and capped at less than 10% of the national grid's power. However, the administrative charges, as highlighted by the NERC international electricity debt, have historically lacked this level of guarantee. The Nigerian Independent System Operator (NISO) is currently working to implement similar security measures for these outstanding ancillary service payments.

Lawyers advising clients on cross-border energy supply agreements with Nigerian entities should review payment mechanisms for ancillary services. This report highlights that these administrative charges are not fully guaranteed, unlike the energy payments, posing a potential collection risk for service providers and requiring careful contractual structuring.

Source: Original reporting via {source}