Economy

Power: Benin Republic, Niger pay Nigeria $10m after disconnection threat

Avatar
Written by Maritime First

…As Group urges FG: Remove import tariffs on renewable energy products***

The Republics of Benin and Niger have paid $10.1m as electricity bill to Nigeria to avert being disconnected from their power source in Nigeria after the Federal Government threatened to disconnect debtors.

It was also learnt that the countries made the payment through their respective power firms, with NIGELEC of the Republic of Niger paying $3.79m, while the Community Electric du Benin of the Republic of Benin remitted $6.32m to Nigeria’s electricity market.

On July 11, 2018, The PUNCH reported that President Muhammadu Buhari decided to join operators in the power sector in calling on international customers receiving electricity from Nigeria to either pay their bills or be disconnected.

Nigeria sells power to the Republics of Togo, Niger and Benin, and classifies the West African countries as international customers.

Officials at the Federal Ministry of Power, Works and Housing told our correspondent in Abuja on Thursday that the international customers, paying for the power received from Nigeria in dollars, owed the country, a development that had increased the financial indebtedness to Nigeria’s power generation companies.

To avert being disconnected, it was gathered on Thursday that Benin and Niger made some payments and that the payment by both countries was disclosed to operators in Nigeria’s electricity industry at the August 2018 power sector stakeholders’ meeting by the Market Operator, an arm of the Transmission Company of Nigeria.

This was also confirmed in a report that was presented to stakeholders at the meeting by the MO, which was obtained by our correspondent from the FMPWH.

On its dashboard on the summary of energy delivery in the month of June 2018, the MO stated that energy delivered to international customers and Ajaokuta Steel was 229,487.29 megawatts/hour.

Under bilateral trading, it stated that the quantum of energy sent out by power generation companies was 104,861.92MWh, while energy delivered to bilateral customers was 95,939.31MWh.

Figures on the dashboard showed that indigenous power distribution companies, as always, got the highest quantum of energy, 2,355,623.4MWh, from the Gencos in the month under review.

The MO further stated that part of the foreign exchange inflows from international customers had been disbursed to service providers in Nigeria’s power sector.

The indebtedness of international customers was also confirmed by the Minister of Power, Works and Housing, Babatunde Fashola, in July, who, however, revealed that Buhari was working hard to ensure that the electricity debts by the country’s neighbours were cleared.

Fashola had also directed the Nigerian Bulk Electricity Trading Company to go ahead and collect its money from the international customers.

He said, “We issued disconnection notices and that is why I’m asking the NBET to go and collect your money because we have duties, obligations and international agreements with them as brother and sister nations.

“But that does not mean they will not pay us if they are defaulting. So, we have issued letters to them to pay their bills, and from time to time, they pay.

“There was a time one head of state came to visit President Buhari and little did I know that the real reason he came was to come and tell him that the (power) sector had issued a notice of disconnection to his country. And you may be interested to know that President Buhari simply told him to go and pay, otherwise we will disconnect you because we are also paying at home.”

In the meantime, a group, the Environmental Rights Action/Friends of the Earth Nigeria, has appealed to the Federal Government to do away with import tariffs and Value Added Tax on renewable energy products.

ERA explained that Nigeria could blaze the trail in renewable energy if government could invest in it (renewable energy) and boost power supply in the country.

Speaking with newsmen in Port Harcourt on Thursday, the Programme Manager of the group, Mike Karikpo, observed that more than 70 per cent of countries in Africa were without renewable energy.

Maintaining that the new form energy in developed countries was environment friendly, Karikpo added that a zero tax policy on renewable energy products and components would address the challenges of regular power supply in Nigeria.

He commended the Federal Government for approving a zero import duty for machinery and equipment used in the power sector.

Karikpo said, “We call on the Federal Government to immediately implement a zero Value Added Tax policy on all renewable energy products and components to accelerate growth of the renewable energy sector.

“We acknowledge the fact that the Federal Government had approved a zero import duty for machinery and equipment used in the power sector, especially those locally produced.

“We also welcome the reduction in tariffs on items like automatic circuit breakers, switches, lamp-holders, and electrical apparatus for switching or protection of  electricity circuit from 20 per cent to 10 per cent.

“We, however, call on the government to ensure zero VAT on products like batteries, charge controllers, inverters and the implementation of the approved low tariffs on other renewable components.

“This will promote in-country assembly and production of renewable energy in Nigeria and will boost job creation for prospective investors in the sector.”

The ERA/FoEN project manager pointed out that the resources to manage renewable energy were available, but stated that the policies were not encouraging.

Punch

About the author

Avatar

Maritime First