The Federal Government has begun talks with the World Bank to improve power distribution and management systems in Nigeria, with funding cost put at $50m, Wale Edun, minister of finance and coordinating minister of the economy, disclosed.
Edun, who chaired a meeting with the World Bank delegates led by Ndiamé Diop, country director for Nigeria, and Olu Verheijen, special adviser to the president on energy, in Abuja on Monday, said the meeting focused on World Bank-supported initiatives, including the Power Sector Recovery Operation (PSRO) and the Distribution Sector Recovery Programme (DISREP).
Issues discussed at the meeting include the provision of $50 million in funding for state solar plants and infrastructure upgrades, the rollout of 3.5 million meters to enhance power distribution, market reforms, and co-financing of the Transmission Company of Nigeria’s (TCN) performance improvement plan.
According to the minister, “This collaboration aims at strengthening Nigeria’s power sector, enhancing energy access, promoting economic growth and development, improving job creation as well as poverty alleviation in line with the Renewed Hope Agenda of the present administration.
This follows the recent approval granted the Presidential Metering Initiative (PMI), by the Federal Government, aimed at closing the nation’s seven million metering gap within three years, leveraging smart metering technologies for data analytics.
Under the PMI, the Nigerian Electricity Regulatory Commission (NERC) in the month of June disbursed a total of N21 billion to the eleven electricity distribution companies (DisCos) for procurement and installation of meters for unmetered Band ‘A’ customers within their franchise areas.
The total fund, according to NERC, was the first tranche of disbursement from the Meter Acquisition Fund (MAF) scheme, based on contributions by the DisCos as of the April 2024 market settlement.
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According to an order on the ‘operationalisation of ‘tranche A of the MAF scheme issued by NERC and sighted by BusinessDay, of the total sum, Abuja Electricity Distribution Company (AEDC) received N2.99 billion, Benin Electricity Distribution Company (BEDC) N1.57 billion, Eko Electricity Distribution Company (EKEDC) N2.92 billion, Enugu Electricity Distribution Company (EEDC) N1.72 billion, Ibadan Electricity Distribution Company (IBEDC) N2.51 billion.
Total amounts received by other DisCos are Ikeja Electricity Distribution Company (IE) N4.35 billion, Jos Electricity Distribution Company (JEDC) N521 million, Kaduna Electricity Distribution Company (KAEDC) N1.22 billion, Kano Electricity Distribution Company (KEDCO) N1.56 billion, Port Harcourt Electricity Distribution Company (PHEDC) N1.36 billion and Yola Electricity Distribution Company (YEDC) N243 million respectively.
The introduction of the MAF followed the failures of previous programmes and strategies, including the Meter Asset Provider (MAP) Regulations 2018 and subsequently, the Meter Asset Provider and National Mass Metering (MAP&NMMR) Regulations in 2021, introduced by past administrations to address metering challenges in the Nigerian Electricity Supply Industry (NESI).
According to NERC, the inability of DisCos to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.
The meter acquisition fund scheme was, therefore, developed and approved by NERC, primarily to address the challenge of DisCos’ creditworthiness inhibiting the deployment of end-use meters in NESI by creating a credible revenue stream from the market funds on the back of which long term financing may be secured by the utilities.
It noted that while the NESI was expected to leverage on the revenue stream under the MAF framework to raise substantial capital to fund metering, there was an imperative to accelerate the closure of the metering gap for all customers currently classified under tariff Band A, for revenue protection and facilitating demand side management for the affected customers.
