The Republics of Benin and Niger have paid $159 million as part settlement for electricity supplied by power generation companies in Nigeria. Minister of Power, Works and Housing, Babatunde Fashola disclosed this at an event recently. Despite the payment, the two countries still have an outstanding balance of $92 million.
The power supplied is not significant
Nigeria supplies both countries electricity as part of a bilateral agreement. The country may have undertaken the agreement as the three companies surrounds her borders. The Republics of Benin and Togo are supplied 200 MW, while Niger Republic gets 100 Mw. The power supplied is however a small fraction compared to the over 2000 MW the country generates and is unable to transmit due to limits in transmission capacity. The FG recently got a $1.55 billion loan from a consortium of development banks to expand her transmission capacity.
Implications of the debt
The companies these countries are indebted to, will in turn owe the firms that provide them gas. This could lead to them running at a loss. Due to the bilateral agreement, they may be hesitant to apply legal means. Power sector operators owe billions of Naira across the value chain, and to banks that provided funds for their acquisition from the Federal Government. This has led to some critics calling for a reversal of the privatization programme.