The Nigerian Electricity FG Plans Aduit of Ajaokuta Steel Complex to Boost Private InvestmentRegulatory Commission (NERC) has raised concerns over the mounting electricity debt of Ajaokuta Steel Company Limited (ASCL), warning that the dormant steel plant and its host community could face disconnection from the national grid if urgent steps are not taken to settle outstanding obligations.
According to NERC’s 2024 Annual Report, Ajaokuta Steel and its host community accumulated an unpaid energy debt of N5.63bn in 2024, with no remittance made to the Nigerian Bulk Electricity Trading Plc (NBET) or the Market Operator (MO) despite consuming power throughout the year. The commission revealed that the steel company received N55.19bn in energy invoices and N440m in service charges but failed to make any payment.
NERC stated that it has escalated the issue to relevant federal ministries in a bid to forestall disconnection, but warned that persistent non-payment poses a significant risk to power market stability.
“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,” the report noted.
The development highlights the broader financial challenges within the Nigerian Electricity Supply Industry (NESI), where liquidity crises continue to undermine service delivery. NERC lamented that such huge debts from large industrial consumers weaken the financial viability of the power sector, already struggling with poor remittances from distribution companies (DisCos).
Ajaokuta Steel, once touted as the backbone of Nigeria’s industrialisation, has remained largely non-functional for over four decades despite several revival attempts. Conceived in the late 1970s, the steel complex has suffered from policy inconsistencies, failed concessions, and underinvestment.
Ironically, despite being dormant, the facility continues to rack up operational and energy costs, raising questions about government oversight and financial prudence.
Industry analysts argue that maintaining energy supply to a non-functional facility without commensurate economic output further deepens the sector’s liquidity woes.
The current administration has reiterated its commitment to reviving the steel giant, describing it as critical to President Bola Tinubu’s Renewed Hope Agenda for industrialisation. In June 2025, the Federal Government confirmed it was in high-level talks with Chinese steel conglomerates to secure technical and financial support to bring the facility back to full operation.
If revived, Ajaokuta is projected to create thousands of jobs, stimulate local production of steel, and reduce Nigeria’s reliance on imported construction materials.
The NERC report stressed that persistent debt from large consumers like Ajaokuta worsens the liquidity crisis in NESI, which already struggles with DisCos remitting less than 70% of market invoices. The regulator warned that failure to enforce strict market rules could jeopardise upstream investments in power generation and transmission.
Industry experts have urged the government to either fast-track Ajaokuta’s operational revival or restructure its power supply agreements to prevent further financial hemorrhage in the power market.
Stakeholders believe that resolving Ajaokuta’s debt issue requires a multi-pronged approach, including:
Restructuring outstanding debts through federal government intervention;
Linking energy supply to actual productive use to justify operational costs; and
Accelerating industrial partnerships to ensure the steel plant resumes operations and contributes to economic growth.
Until then, NERC’s warning remains clear—if Ajaokuta fails to pay its outstanding N5.6bn electricity debt, a disconnection from the national grid is imminent, potentially complicating government efforts to revive the steel giant.