The Central Bank of Nigeria (CBN) on Monday said the local meter manufacturers can access 70 percent of total cost of the applicable expenses related to meter manufacturing/assembly.
For the Electricity Distribution Company (DisCo), the CBN said the amount to be accessed is to be determined based on the volume and type of meters to be procured by each DisCo as well as the prices at which meters are bought during the bulk procurement.
This was stated in the framework for financing of National Mass Metering Programme (NMMP) released by the apex bank on Monday.
This Framework outlines the operational modalities of the CBN financing support to the DisCos (Downstream) and Local Meter Manufacturers (Upstream).
The introduction of the service-based tariff (SBT) in the Nigeria Electricity Supply Industry (NESI) effective from 1st September 2020 has put increased emphasis on the need to close the metering gap in the NESI. The closing of this gap will enhance efficiency of revenue collection by Distribution Companies (DisCos) and thereby facilitate meeting their obligations to other upstream market participants.
According to analysis provided by Nigeria Electricity Regulatory Commission (NERC), the current metering gap in the NESI – based on recent customer enumeration data – is over 10 million, this comprises of unmetered customers as well as customers with obsolete meters that need to be replaced.
To deal with this, President Muhammadu Buhari approved the National Mass Metering Program (NMMP) implementation.
The NMMP CBN facility is restricted to the procurement and deployment of meters and the associated infrastructure (software and hardware) to support the metering network.
The framework states that Procurement of fully assembled meters from overseas is prohibited except meters imported by Meter Asset Providers (MAP) already in the country as at September 30, 2020 and verified by NERC; and importation of related metering infrastructure that are currently being produced in the country is also prohibited.
On interest rate, the facility is to be administered at an “all-in” interest rate of not more than 9 per cent per annum or any other rate as may be specified by CBN. As part of the Bank’s Covid-19 relief package, the interest rate to be charged up to 28th February 2021 shall not exceed 5 per cent per annum.
As regards collateral requirement, NERC’s approval of a DisCos loan request as a regulated debt obligation to be charged against all energy collections for the Nigeria Electricity Supply Industry (NESI) as the next line charge in the payment waterfalls of each DisCo below the existing payment to the Nigeria Electricity Market Stabilization Facility (NEMSF), will serve as a collateral for the lending.
