Nigeria votes N21bn for free electricity metres to citizens

Business a.m.

Nigeria’s central government in Abuja, the country’s political capital, has taken a significant step in addressing the country’s long-standing electricity metering issues by allocating N21 billion for the Presidential Metering Initiative. The initiative aims to bridge the nation’s vast metering gap by providing electricity metres at no cost to unmetered power users across the country.

The development was announced in an order by the Nigerian Electricity Regulatory Commission on Friday, June 21, with the number – NERC/2024/072, titled “Order on the Operationalisation of ‘Tranche A’ of the Meter Acquisition Fund”.

The commission expressed confidence that the deployment of funds under the Meter Acquisition Fund (MAF) scheme would accelerate the deployment of metres and close the current metering gap. It added that this would help in reducing commercial and collection losses to power distribution companies, enhancing the quality of service, and improving customer satisfaction.

“The funds accrued as of the April 2024 market settlement cycle and available for procurement of metres under the first tranche of the MAF scheme is in the sum of NGN21,864,851,725. The commission hereby approves the use of a sum of NGN21,000,000,000 apportioned pro rata to contribution by the Discos as Tranche A of the MAF scheme,” NERC stated.

The power sector regulator also disclosed that the fund was broken down and allocated to each Disco for the purchase of end-use customer metres, emphasising that all the metres to be procured and installed under the MAF framework shall be at no cost to the customers of the Discos.

The NERC also noted that the order shall become effective on June 13, 2024, and may be amended or revoked by subsequent orders issued by the commission.

The NERC, in its effort to deliver on the crucial mandate of metering the country’s electricity consumers, enacted a series of regulations since 2018, including the Metre Asset Provider Regulations and the Metre Asset Provider and National Mass Metering Regulations in 2021. These interventions aimed to provide a suite of metering options to power users, but despite these notable steps, the gap between the number of unmetered and metered customers in Nigeria persists at a staggering seven million, highlighting the urgent need for decisive action.

The disheartening revelation that distribution companies have been hampered by a paucity of financing to acquire and deploy end-use metres and other capital investments has surfaced as the primary impediment in closing the crippling metering gap that persists in Nigeria’s power sector. Reports show that this inability to secure funding through debt or equity has become an unfortunate obstacle in the journey towards enhancing metering coverage and ultimately improving the reliability of electricity supply in the country.

In a decisive move to tackle the chronic problem of Disco creditworthiness inhibiting the deployment of end-use metres in the Nigerian Electricity Supply Industry (NESI), the NERC  developed and approved the Meter Acquisition Fund scheme. Primarily designed to alleviate the strain on Discos’ creditworthiness, the Fund scheme seeks to establish a trustworthy revenue stream from market funds that can then serve as a sturdy base for securing long-term financing, ultimately freeing up resources for the deployment of metering solutions and alleviating the metering crisis faced by Nigerian consumers.

The NERC further disclosed that the metre acquisition fund shall be managed by a designated fund manager, ensuring that the collected funds are utilised in accordance with terms and conditions negotiated by the Discos and authorised by the commission.

The commission also approved the deregulation of metre prices under the MAP scheme via order NERC/2024/040 to ensure efficient pricing of metres while responding more quickly to changes in macroeconomic parameters.

The order provided that all prices of metres under the  Meter Asset Provider (MAP) scheme should be determined through a transparent and competitive bidding process by eligible MAPs.