Written By: Faith Jemosop
In the first quarter of 2025, Benin and Togo accumulated more than $11 million in unpaid electricity bills to Nigeria, according to the Nigerian Electricity Regulatory Commission (NERC). Out of a total $17.24 million billed to six international customers, only $5.8 million was recovered, representing a collection rate of just 34%. While Niger Republic fully paid its invoice of $3.03 million, Togo failed to make any payment, and Benin only remitted partial amounts. This development is fueling serious concern within Nigeria’s power sector about the sustainability and economic viability of cross-border electricity exports.
NERC’s report reveals the details behind the growing debt. Togo’s national power utility, Compagnie Energie Electrique du Togo (CEET), made no payments on its bilateral supply deals involving Odukpani and Paras power plants. Benin’s Société Béninoise d’Énergie Électrique (SBEE) fared slightly better but still fell short. It paid $0.3 million against a $1.73 million bill from Transcorp-Afam 3, and $1.82 million out of $4.97 million owed to Transcorp-Ughelli. However, SBEE made no payment for the Odukpani or Paras energy deals. These figures highlight a disturbing pattern of non-compliance that is increasingly testing Nigeria’s patience as a regional energy supplier.
Nigeria has long positioned itself as a key electricity provider in West Africa, exporting power to its ECOWAS neighbors via structured bilateral contracts. However, the recurring issue of non-payment undermines the financial health of its power sector, discourages investment, and affects operations across the entire electricity value chain, from generation to distribution. NERC has stated that persistent defaults from international clients could compel Nigeria to rethink its role as a regional power exporter, potentially leading to the restriction or suspension of future exports.
Domestic Non-Payment Crisis
Nigeria’s electricity sector is not just suffering from external defaults; domestic defaulters are equally problematic. For example, Ajaokuta Steel Company failed to pay two invoices totaling ₦1.38 billion and ₦134 million respectively. Several industrial customers, including NDPHC/Sunflag, Kam Steel, and Sapele/Phoenix, also defaulted or only partially paid significant debts amounting to hundreds of millions of naira. These domestic shortfalls compound the financial strain already inflicted by foreign non-payment, placing further pressure on generation companies (GenCos) and transmission operators (TCN), and ultimately affecting electricity supply reliability.
The Disconnection Threat
In light of the continued non-payment, NERC has issued stern warnings, signaling that countries like Benin and Togo risk disconnection from Nigeria’s grid. According to Punch Nigeria, the regulator emphasized that allowing debts to accumulate weakens both domestic and regional energy security. Nigeria’s stance is now shifting from diplomacy to enforcement, with the possibility of capping or halting power supply until payments are made. If enforced, this could spell serious trouble for energy reliability in Togo and Benin, nations already heavily reliant on Nigerian electricity for their grid stability.
The Regional Energy Framework
Nigeria’s supply of electricity to its neighbors is enabled by a web of regional infrastructure. Chief among these is the CEB–NEPA Interconnector, a high-voltage transmission line that links Nigeria to Benin and Togo. Commissioned in 2007, this infrastructure enables seamless bilateral power flows. These relationships are further integrated through the West African Power Pool (WAPP), an ECOWAS-driven initiative aimed at harmonizing power production and distribution across West Africa. Nigeria’s Transmission Company of Nigeria (TCN) plays a key role in managing these cross-border lines. These systems represent years of strategic investment, all of which are jeopardized when payments are delayed or skipped altogether.
There are several factors behind the consistent pattern of non-payment. First, a poor remittance culture plagues the region, one that NERC has described as “long-standing” and deeply entrenched. Second, economic constraints in Togo and Benin, including revenue collection inefficiencies and foreign exchange shortages, reduce their ability or willingness to meet contractual obligations. Third, limited enforcement mechanisms mean Nigeria has little leverage beyond the threat of disconnection, which itself carries geopolitical risks. These systemic weaknesses continue to drag down the financial sustainability of cross-border energy trade.
The consequences of these unresolved debts ripple through multiple layers:
- Investor Confidence
When international customers default without repercussions, it sends a negative signal to investors. It suggests that revenue recovery is uncertain, which may discourage both local and foreign investors from supporting power infrastructure projects in Nigeria. - Liquidity Crisis
GenCos and transmission companies depend on timely payments to maintain operations and reinvest in infrastructure. Unpaid invoices choke cash flow, delay upgrades, and reduce overall power reliability in Nigeria. - Regional Energy Stability
If Nigeria restricts power supply, Benin and Togo could experience serious blackouts. Such instability would erode trust in the ECOWAS power cooperation framework and could prompt a scramble for alternative, and possibly more expensive, energy sources. - Policy Reform Pressure
These events could catalyse calls for reform. This might include stronger enforcement clauses in bilateral contracts, the use of escrow accounts, or third-party guarantees to ensure payments are made promptly.
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Nigeria and NERC are expected to respond with stricter measures. This may involve reducing supply volumes, issuing disconnection notices, or even legally challenging defaulters through ECOWAS frameworks. At the same time, bilateral agreements might be renegotiated to include payment guarantees, credit thresholds, or upfront deposits. Regionally, the West African Power Pool may take a more active role in enforcing payment discipline among its member utilities.
From the perspective of Benin and Togo, diplomatic engagement is likely to intensify. Their governments may seek bridge financing or alternative funding mechanisms to settle debts. Additionally, both nations are expected to accelerate investments in domestic generation, especially hydroelectric projects like the Nangbeto Dam,to reduce their reliance on imported electricity from Nigeria.
Domestically, Nigeria must confront its own issues. Strengthening revenue collection from local clients, industrial, governmental, and residential, will be essential. So too will be building internal systems that prevent further accumulation of debts, whether through smart metering, legal reform, or corporate accountability.
