- The Nigerian Electricity Regulatory Commission (NERC) threatens Ajaokuta Steel Company with grid disconnection over ₦1.2 billion in unpaid debt.
- ASCL has not paid ₦1.27 billion to NBET and ₦0.09 billion to the Market Operator for Q1 2024, with total debt reaching ₦33.71 billion as of November 2023.
- Minister Shuaibu Audu plans meetings with stakeholders and reports progress in raising over ₦35 billion to restart the Ajaokuta Steel Plant, which President Tinubu’s administration supports.
The Nigerian Electricity Regulatory Commission (NERC) has warned Ajaokuta Steel Company Limited (ASCL) that the company could face disconnection from the national grid due to a significant unpaid debt totalling ₦1.2 billion. NERC highlighted this warning in its first-quarter report, released on July 24.
The report categorised ASCL as a “special customer,” a designation for entities with unique circumstances. NERC’s report shows that ASCL and its host community have not made any payments towards their electricity debt for the first quarter of 2024. Specifically, ASCL owes ₦1.27 billion to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦0.09 billion to the Market Operator (MO).
NERC pointed out that ASCL’s failure to pay is part of a long-standing issue. The commission has called on federal government authorities to step in and address this urgent problem. If ASCL does not settle its debt, the commission might disconnect the company from the national grid, disrupting its operations and impacting the broader electricity supply.
On January 10, the Transmission Company of Nigeria (TCN) issued a 14-day suspension notice to ASCL for non-compliance with market rules. TCN reported that ASCL’s debt had reached ₦33.71 billion as of November 2023, underscoring the severity of the financial crisis.
Minister of Steel Development Shuaibu Audu announced plans to meet with TCN and other stakeholders to address the threat of disconnection. Audu also revealed that President Bola Tinubu had approved the formation of a committee to revive the inactive Ajaokuta Steel Plant.
On May 23, Audu updated the public on efforts to restart the steel plant. He announced that the ministry is working to raise over ₦35 billion needed to restart the light mill section of the plant. Local financial institutions will provide the necessary funding. This initiative aligns with President Tinubu’s economic strategy to improve Nigeria’s economic profile through strategic investments and reforms.
Audu’s comments highlight the administration’s commitment to solving the steel plant’s operational and financial issues. The formation of the committee and the push for funding are critical steps towards revitalising the dormant plant and improving its economic stability.
NERC’s threat of disconnection emphasises the severe financial challenges ASCL faces and the urgent need for resolution. Addressing these financial issues quickly is crucial to avoid disrupting electricity supply and operations and to stabilise the national grid.