Nigeria electricity market faces liquidity risks amid massive debts

The Nigerian House of Representatives Committee on Power has called for the urgent settlement of outstanding debts within the electricity market to prevent threats to liquidity and industry sustainability. During an oversight visit to the Nigerian Independent System Operator (NISO) in Abuja, Committee Chairman Nwokolo Victor Onyemaechi warned that defaults by market participants could negatively impact the entire electricity value chain.

Specifically, the Niger Delta Power Holding Company (NDPHC) has reported that it is owed more than N400 billion by market participants, including the Nigerian Bulk Electricity Trading Plc (NBET). NDPHC Managing Director Jennifer Adighije identified several operational challenges, including unpaid debts, transmission constraints, low tariffs, gas supply issues, and vandalism. She also noted that financial constraints have prevented the company from fully utilizing its generation capacity, with only 500MW of its 1,500MW available capacity being allocated.

Other affected electricity distribution companies (DisCos) mentioned in relation to market obligations include Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC), Enugu Electricity Distribution Company (EEDC), Jos Electricity Distribution Company (JEDC), and Kaduna Electricity Distribution Company (KAEDCO).