The Nigerian Electricity Regulatory Commission has warned that Ajaokuta Steel Company Limited and its host community face imminent disconnection from the national grid due to their failure to settle outstanding electricity debts totalling ₦5.63bn in 2024.
According to the 2024 Annual Report of the commission, Ajaokuta received energy supply and grid services during the year but did not remit any payments to the Nigerian Bulk Electricity Trading Plc and the Market Operator, prompting regulatory intervention.
“Ajaokuta Steel Co. Ltd and the host community did not make any payment for the ₦55.19bn and ₦440m energy invoices and service charges received from NBET and MO, respectively, in 2024,” the commission stated.
The NERC report noted that the situation has been escalated to relevant federal ministries to forestall the disruption of power supply to the critical industrial facility. However, it warned that persistent non-payment could result in the steel complex being disconnected.
“The commission has escalated the issue of continual non-payment of electricity bills by Ajaokuta to the relevant federal ministries to find a lasting solution. Failure to settle the obligations may put the Ajaokuta complex at risk of being disconnected from its service providers (NBET and MO) on the grounds of gross indebtedness,” it added.
The development comes amid concerns about mounting debts across the Nigerian Electricity Supply Industry, where distribution companies collectively owe billions to upstream suppliers. Ajaokuta Steel, a long-standing symbol of Nigeria’s industrial ambition, had remained largely dormant for decades despite repeated efforts at revival.
Its inclusion among non-paying direct customers raises further questions about government-backed entities’ compliance with power market obligations. NERC’s report did not disclose whether any enforcement steps had been taken beyond the escalation, but warned that indebted bilateral customers and poor remittances from distribution companies jeopardised the financial integrity of the power sector.
It added that the upstream segment of the market continues to be plagued by liquidity challenges. “It is clear that the upstream segment of the market continues to be plagued by liquidity challenges.
“Under the payment assurance waterfall regime, DisCos’ inability to achieve 100 per cent remittance to the upstream segment indicates that they were unable to earn significant portions of their allowed revenues. Without this, they would also be unable to undertake necessary operational/capital investments,” the commission said.
Ajaokuta Steel, which was originally conceptualised in the late 1970s, has remained largely non-functional for decades due to a mix of policy inconsistencies, failed concessions, and underinvestment. However, the current administration has pledged to complete the revival process and position the company as a major driver of Nigeria’s industrial resurgence.
The Federal Government announced in June that it had taken additional steps in its quest to revive the moribund Ajaokuta Steel Company. The government said it had commenced high-level talks with leading Chinese steel conglomerates, seeking technical expertise, financial backing, and industrial partnerships to return the facility to full productivity. Despite its dormancy, the steel company keeps incurring energy and other costs.
Credit: punchng.com
