- Weak payment compliance by regional electricity off-takers under bilateral agreements.
- Increased financial pressure on Nigeria’s power companies and reform efforts.
Nigeria’s electricity export debt continues to rise, placing added strain on an already challenged power sector. From the outset, Nigeria’s electricity export debt reflects weaknesses in regional power trade enforcement. Therefore, growing arrears now threaten sector liquidity and investor confidence.
Nigeria’s power industry faces funding and infrastructure constraints. However, unpaid regional electricity bills have intensified these pressures. According to the Nigerian Electricity Regulatory Commission (NERC), three West African countries now owe Nigerian power firms over N25 billion. These debts relate to electricity supplied under bilateral export agreements.
The affected countries include Togo, Benin, and the Niger Republic. Their state-owned utilities purchase electricity from Nigerian generation companies. These transactions operate under cross-border bilateral arrangements. Consequently, Nigerian firms rely on timely payments to cover their operational costs.
NERC’s latest quarterly report shows that international customers received invoices worth $18.69 million in the third quarter of 2025. However, they paid only $7.125 million during the period. As a result, unpaid balances reached $11.56 million for the quarter alone. When combined with earlier arrears, outstanding debt climbed to $17.8 million. At current exchange rates, this amounts to approximately N25.36 billion.
The three defaulting utilities include Compagnie Énergie Électrique du Togo, Société Béninoise d’Énergie Électrique, and Société Nigérienne d’Électricité. Each entity sources power from Nigerian generation companies. Therefore, payment delays directly affect Nigeria’s electricity value chain.
Domestic bilateral customers performed better during the same period. Local buyers paid N3.19 billion out of a total invoiced amount of N3.64 billion. This represents an 87.6% remittance rate. In contrast, international customers paid only about 38 per cent of the billed amounts, making foreign receivables a persistent concern.
These unpaid obligations worsen Nigeria’s electricity export debt and weaken sector cash flow. Generation companies struggle to maintain equipment and fuel supply. Meanwhile, investments in transmission and distribution remain underfunded. As a result, reliability challenges persist nationwide.
The situation also raises concerns about the governance of regional power trade. Cross-border electricity sales play a key role in the West African Power Pool initiative. However, weak enforcement mechanisms undermine confidence in bilateral agreements. Therefore, stakeholders now question contract discipline within the regional framework.
Nigeria relies on power exports to strengthen regional integration and earn foreign revenue. Yet, delayed payments limit these benefits. Experts argue that stricter guarantees and enforcement tools are necessary. Without them, arrears may continue to accumulate.
In conclusion, Nigeria’s electricity export debt presents both economic and policy challenges. While regional power trade remains important, sustainability depends on the timely receipt of remittances. Therefore, more vigorous enforcement and improved contract discipline will be critical for long-term sector stability.