![Nigerian food market. [Photo credit: The Guardian NG]](https://thepreviewmedia.com/wp-content/uploads/elementor/thumbs/Nigeria-Food-market0-rnhwouhomgb6qrfulkpmvgq8nzn41y6tcgi4mirafc.jpg "Nigerian food market. [Photo credit: The Guardian NG]")
The Nigerian Independent System Operator (NISO) has rejected payment proposals submitted by some electricity Distribution Companies (DisCos) over outstanding market obligations, saying the plans are inadequate given the size and age of the debts.
The position was made public at the end of a four-day public hearing with the DisCos in Abuja.
A five-member committee led by the Executive Director, Market Operations, Edmund Eje, presided over the hearing.
The panel was set up to review outstanding obligations owed to the Nigerian electricity market and to service providers, and to examine payment arrangements proposed by the DisCos.
According to NISO, the deliberations focused on balances that have continued to undermine liquidity and the effective functioning of the market.
“Following extensive deliberations, the payment proposals presented by some of the DisCos were considered unacceptable to NISO at the hearing, particularly in view of the magnitude and age of the outstanding obligations,” the operator said in a statement issued after the hearing.
Government intervention cited
The committee expressed concern that despite previous interventions, several DisCos are yet to clear their remaining debts.
It noted that the federal government had earlier netted off approximately 97 per cent of the DisCos’ outstanding obligations for the period between 2015 and 2020.
“Consequently, the committee stressed the need for the affected DisCos to take immediate steps towards liquidating their remaining balances,” NISO stated.
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Market operators have long complained that unpaid invoices from DisCos to generation companies, transmission service providers and other market participants have created a liquidity crisis in the sector.
Sanctions
NISO said it would proceed with the next steps under the Market Rules, which include the application of sanctions against defaulting DisCos.
However, the operator said it remains committed to “constructive engagement, transparency and due process” as it works with market participants.
The hearing, NISO added, underscores “the critical importance of market discipline, compliance and accountability among market participants,” as well as the need for continued collaboration to strengthen market confidence and ensure the sustainability and effective functioning of the Nigerian electricity market.
