The Nigerian Electricity Regulatory Commission (NERC) has issued a stern warning that the Ajaokuta Steel Company Limited and its host community may be disconnected from the national electricity grid due to unpaid energy debts amounting to ₦5.63 billion for the year 2024.
This was revealed in the Commission’s 2024 Annual Report, which highlights the company’s continued consumption of grid power without any remittance to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) throughout the year.
“Ajaokuta Steel Co. Ltd and the host community did not make any payment for the ₦55.19 billion and ₦440 million energy invoices and service charges received from NBET and MO, respectively,” NERC stated in the report.
Grid Supply Without Payment
Despite receiving uninterrupted power supply and grid services, Ajaokuta made no payment obligations, a situation the Commission described as unsustainable and potentially disruptive. The regulator noted that it has escalated the issue to relevant federal ministries to prevent immediate disconnection of the industrial facility.
“The Commission has escalated the issue of continual non-payment of electricity bills by Ajaokuta to the relevant federal ministries. Failure to settle the obligations may put the Ajaokuta complex at risk of being disconnected from its service providers on the grounds of gross indebtedness,” the report warned.
Worsening Sector Liquidity
The development adds to ongoing concerns about revenue shortfalls in Nigeria’s electricity supply industry, where power distribution companies (DisCos) and some direct customers have failed to meet payment obligations to upstream suppliers. This, NERC said, undermines the financial health and investment viability of the sector.
“The upstream segment of the market continues to be plagued by liquidity challenges,” the Commission noted. “DisCos’ inability to remit 100 per cent of market invoices under the payment assurance waterfall regime means they cannot recover sufficient revenue, which in turn limits their ability to invest in infrastructure.”
Ajaokuta’s Industrial Legacy and Persistent Challenges
Once envisioned as the centerpiece of Nigeria’s industrial revolution, Ajaokuta Steel Company has remained largely non-operational since it was first conceptualized in the late 1970s. Despite repeated efforts to revive it including failed concessions, chronic underinvestment, and policy inconsistencies it continues to generate operational expenses, including energy costs.
In June 2025, the Federal Government renewed its commitment to reviving the dormant plant, announcing high-level talks with leading Chinese steel manufacturers aimed at securing technical assistance, financing, and strategic partnerships.
However, NERC’s report underscores the contradiction of continuing to subsidize energy supply to non-performing state-owned enterprises, especially at a time when the electricity market is struggling with debt and liquidity crises.
A Test of Political Will
The steel complex’s inclusion among non-paying direct customers raises new concerns about compliance among government-backed entities and the political will to enforce payment obligations without exception.
While NERC did not outline any concrete enforcement measures beyond the escalation to federal authorities, its warning serves as a clear signal: even state-owned industrial assets will not be exempt from regulatory action if debts persist.
