Benin, Togo owe Nigeria N37bn for electricity services

N****igeria’s international electricity customers of Togo and Benin Republic are owing $28.33m (N37.44bn) debt from ancillary services rendered in 3 years.

Analysis of annual reports released by the Nigerian Electricity Regulatory Commission (NERC) from 20203 to 2025 showed that the debt is for services used to transfer electricity from the generation plants to usage by the state electricity company of the countries, thus not payment for electricity generated for them.

The money is classified to belong to Market Operator (MO), a term used for Transmission Company of Nigeria before its unbundling.

The report showed that Nigeria has three international customers of Benin, Niger and Togo who all accumulated a bill of $183.5m for the services.

The countries are supplied through their state-owned utility companies called Societe Nigerienne d’electricite (NIGELEC), Societe Beninoise d’Energie Electrique (SBEE) and Compagnie Energie Electrique du Togo (CEET).

The reports stated that from the $183.5m services, the companies paid $155.17m. A breakdown showed the three companies got a bill of $53.55m in 2023 but they paid $50.36m, leaving an outstanding balance of $3.19m.

In 2024, they got a bill of $56.04m but paid $42.06, leaving a balance of $13.98m. in 2025, the bill increased to $73.91m but they paid $62.75m leaving a balance of $11.16m.

Togo owes 95% of debt

NIGELEC was charged a total of $44.84m during the period but it paid $44.85m, meaning it paid more than what it was charged. This might be to settle previous debt not paid before 2023.

While SBEE was charged N46.18m, it paid $44.71m, leaving a balance of $1.47m. CEET was billed $50.38m but it paid $23.5m, leaving an outstanding balance of $26.88m. this means that the company is owing 95 percent of all the debt owed during the period while the remaining 5 percent is owed by Benin.

How payment works – Expert

Speaking on the debt, Tobi Oluwatola, a partner at AP3 Advisory Services and chief executive of TAO Technologies, explained that the payment is a residual service charge comprising the regulated fee that covers the regulator, the transmission company, the bulk trader and the market and system operator, running at around $20 million a quarter.

He stated that the value of the electricity itself, the energy and capacity for the roughly 350 megawatts supplied, is settled separately under those guaranteed contracts, and it is larger.

“The number in the news is the small administrative slice of the trade, and it happens to be the one layer not yet fully behind a guarantee. The neighbours pay this slice to the generating companies, alongside their energy and capacity charge; it is the generating company that pays the market operator.”

He added that the mechanism for payment for electricity generated for the international customer has already been settled through the Eligible Customer reforms of 2017 and the Willing Buyer, Willing Seller framework of 2019.

He said cross-border and large-industrial electricity supply was moved onto direct, guaranteed bilateral contracts entered by neighbouring utilities directly with Nigerian Generating Companies (Gencos).

“To buy power this way, a customer must post a letter of credit or a bank guarantee to the market operator before a single megawatt flows. That is precisely why the energy trade with our neighbours works: it was designed to be commercially disciplined, and it runs on surplus capacity, not on power taken from Nigerian homes, and is capped at less than 10 per cent of the power on the grid.”

For the ones disclosed by NERC, he said the system operator is moving to secure its service charges the same way the energy contracts already are and where a balance lags, it is usually an older government-linked plant on legacy terms, inside a market simply mid-way through a transition, not a foreign default.