FG-owned Company Idle for Decades Owes N5.6 Billion in Electricity Debt, Risks Disconnection
- NERC has warned that Ajaokuta Steel Company may be disconnected from the national grid due to over N5.63 billion in unpaid electricity bills
- Despite receiving power supply, the company failed to make any payments to key electricity market operators, prompting regulatory intervention
- The FG is working to revive the long-dormant steel company through talks with Chinese investors, even as it continues to accumulate energy debts
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
The Nigerian Electricity Regulatory Commission (NERC) has warned that Ajaokuta Steel Company and the nearby community could soon be cut off from the national power grid because they have not paid their electricity bills, which now total N5.63 billion in 2024.
Source: UGC
Ajaokuta Steel ignores power debts
According to NERC’s 2024 report, Ajaokuta used electricity and grid services during the year but did not pay anything to the Nigerian Bulk Electricity Trading (NBET) or the Market Operator (MO).
According to Punch, the report revealed that Ajaokuta failed to pay invoices of N55.19 billion from NBET and N440 million from MO.
NERC said it has reported the issue to the relevant government ministries in hopes of avoiding a power cut. However, the commission made it clear that if the steel company continues to ignore its debts, it may be disconnected from the power grid.
This situation comes at a time when the power sector is facing serious financial troubles. Distribution companies are also struggling with large debts, affecting the flow of money to power suppliers.
Ajaokuta’s failure to pay adds to concerns about government-owned businesses not meeting their responsibilities in the electricity market.
NERC’s report didn’t say whether any strict action has been taken yet, but stressed that poor payments from companies like Ajaokuta and low remittances from DisCos (distribution companies) are damaging the financial health of the power sector.
It also noted that the upstream side of the electricity market is still dealing with cash flow problems.
DisCos are not paying the full amount they owe, which affects their ability to invest in operations and infrastructure.
FG's Ajaokuta Steel revival plan
Ajaokuta Steel, which was planned in the late 1970s to be a key part of Nigeria’s industrial growth, has been inactive for many years due to poor policies, failed management agreements, and a lack of funding.
Senator Natasha Akpoti-Uduaghan earlier made a case for the revival of the steel plant, insisting that it has the potential to produce aircraft spare parts in Nigeria.
The current government says it is committed to reviving the company and making it a key part of Nigeria’s industrial progress.
In June, the Federal Government said it had started discussions with major Chinese steel firms to help bring Ajaokuta back to life.
Talks are focused on getting expert support, funding, and partnerships. Despite not being operational, the steel company still faces high energy and other running costs.
Source: Facebook
Tinubu appoints new MD for Ajaokuta Steel
Earlier, Legit.ng reported that President Bola Ahmed Tinubu named Nasir Naeem Abdulsalam as the new Managing Director of Ajaokuta Steel Company.
The appointment was made in line with the amended 2008 Act governing the salaries and allowances of specific political and judicial office holders.
According to Segun Imohiosen, director of Information and Public Relations in the Office of the Secretary to the Government of the Federation, the appointment became effective on April 3, 2025.
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Source: Legit.ng
