BusinessDay
Nigeria's leading finance and market intelligence news report.

DisCos to roll out over 2m new meters by year end

Nigeria’s electricity distribution companies (DisCos) are on course to roll out more than 2 million meters by the end of the year under the meter distribution programme of the Federal Government.

The planned roll out is to happen under the second phase of the National Mass Metering Programme funded by the Central Bank of Nigeria (CBN).

Industry sources told BusinessDay that the CBN had begun mobilising funds to local meter manufacturers for the meter procurement. Electricity meter companies in Nigeria largely assemble components to fulfil orders.

Last year, the Federal Government said it would provide 6 million free meters for electricity customers under the National Mass Metering Programme (NMMP).

The programme bankrolled by the CBN will happen in three phases.

Under Phase 0, meter providers got direct financing for quick deployment of 1 million meters. This will cover meters already imported and stuck at the ports, those already available in-country and orders yet to be fulfilled by Meter Asset Providers.

DisCos have been scrambling to distribute 1 million meters to customers in their franchise areas under this phase. BusinessDay findings show that of the first batch of 900,000 meters supplied to them, only about 700,000 have been installed. Some DisCos say they have completed this phase.

In the Phase 1, currently underway, the CBN is providing $100 million financing for procurement targeted exclusively at local manufacturers and assemblers. It will run through the end of the year.

It is expected that between 2 and 3 million meters could be issued. Under the government plan, 1.5 million meters are to be issued through the NMMP and an additional 1 million meters or more could come from the MAPs programme and vendor financing initiatives.

The electricity sector regulator NERC last month issued the Meter Asset Provider and National Mass Metering Regulation, (Regulation) 2021, a hybrid framework that merges the Meter Asset Providers (MAP) Regulation, 2018, and the National Mass Metering Policy (NMMP).

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The aim is to ensure the closing of the metering gap through an accelerated roll-out of meters; to eliminate the prevalent practice of estimated billing in the Nigerian Electricity Supply Industry (NESI), to attract private investment in the provision of meters/metering services in NESI, and to enhance revenue assurances at the retail end of the NESI.

The new regulation opens up meter distribution to local meter manufacturers and assemblers, investors contracted under the MAPs who import fully built prepaid meters and to DisCos who are now allowed to source their meters and have customers finance the acquisition.

“The Regulation is a step in the right direction,” said Chinenye Ajayi, an expert in electricity law and policy, and associate partner at the law firm of Probitas Partners LLP, in an opinion piece published in BusinessDay.

“However, the successful implementation of these frameworks will depend largely on the ability and willingness of the NERC to enforce the Regulations,” Ajayi said.

The third phase of the programme will see the World Bank give a 20 percent buffer allowance to local manufacturers in order to improve their competitiveness. It will also see joint venture operations among local companies with the goal of Nigeria having the capacity to fulfil its meter orders locally.

Scheduled to run through the fourth quarter of 2023, 4 million meters are expected to be delivered at the estimated procurement cost of $200 million.

Industry experts say the lack of capacity of meter installers was a major factor slowing the plan to get prepaid meters to electricity customers.

The Federal Government had earlier foreclosed importation of prepaid meters having been led to believe that local manufacturers have the capacity to fulfil orders. This led to lawsuits and growing customer disaffection seen in their refusal to settle what they term as ‘crazy bills.’

The government has now opened up the space to investors including importers after extracting from them a concession that all litigation would be dropped and they would comply with the process.

This development has opened up the metering space in Nigeria for investments. In the course of the year, there has been massive recruitment and training of meter installers in Nigeria.

The National Power Training Institute of Nigeria (NAPTIN), a government agency that provides training for power sector personnel and coordinates training activities in the sector, has trained hundreds of Nigerians through the N-Power programme. Schneider Electric and other organisations have also organised training programmes for meter installers in Nigeria helping to create new jobs.

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