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Stakeholders say CBN electricity intervention may end estimated billing, stranded power

Funding standing at about N120 billion being provided by the Central Bank of Nigeria of Nigeria to improve infrastructure gap in the Nigeria electricity sector may end the lingering the challenge of arbitrary billing of consumers and enable the evacuation of stranded power, stakeholders say yesterday.

The Special Adviser to the President on Infrastructure, Ahmad Zakari, last week said N120 billion capital expenditure (CAPEX) fund is being provided by the Central Bank for DisCos to improve infrastructure for the tariff classes similar to the ongoing metering programme.

Privatised in 2013, the Nigerian electricity market had remained a mirage. Although the generation capacity has improved, the inability of the distribution companies and bottlenecks from the transmission company put the country in perpetual darkness.

Given that the distribution companies were unable to meter consumer, the Federal Government through funding option from CBN last launched a mass metering programme, which Zakari noted that it has led to the installation of about 600, 000 meters.

With this situation, industry players noted that the sector would improve on revenue collection to douse the revenue and liquidity crisis, which continue to deter investors from the sector.

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They also insisted that the repeated cases of stranded as well as load rejection by the distribution may reduce.

The experts decried the attitude of DisCos in the sector, stating that the sincerity on the part of the investors to end estimated billing of consumers was lacking.

National President, Association for Public Policy Analysis (APPA), Princewill Okorie noted that initiative that would end estimated billing of consumer remained a critical development, adding that accountability was critical in the power sector.

Former Chairman of Nigerian Electricity Regulatory Commission (NERC), Sam Amadi said the intervention by the CBN to meter consumer should be supported.

He however stressed that there was need for NERC to speak more on funding for the sector and also ensure that its capacity to regulate expenditure and ensure it goes to what is relevant and prudent should be a critical factor in funding support for the sector.

“I support the funding for meters but I doubt if it will solve the problem because the DisCos will use the fund to largely replace bad meters and control revenue loss. But the rebate of unmetered customers will remain high and undermine any movement to cost reflective tariff.

“Government should directly mandate full metering in a large scale and allow discos charge whatever tariff that is necessary and no longer fund DisCos. Meter Nigerians and let them pay the right tariff and let discos live or die by their own efficiencies. If they fail the efficiency test you unbundle them,” Amadi said.

Insisting the funding approach from CBN, which directly targets infrastructure instead of subsidizing was the right way to go, PwC’s Associate Director, Energy, Utilities and Resources, Habeeb Jaiyeola, advised the government to clearly outlined and monitored the intervention to ensure it achieved projected objectives.

He said the National Mass Metering Programme may need to be checked against some of its set objectives in terms of coverage, availability and completion time.

“This is an important process for any past and future intervention programme in ensuring set objectives are achieved. An assessment of the impact of intervention funding in the power sector also needs to be looked into. While government intervention continues to be an important sector catalyst, monitoring impact will ensure government scarce resources are appropriately channeled for the benefit of Nigerians,” he expert said.

An energy expert, Michael Faniran noted that metering remained critical for the power sector as it would enable the sector to generate enough revenue to address the liquidity gap in the sector.

According to him, without government intervention in bridging the metering gap, DisCos may not show willingness to end arbitrary billing of consumers.

Faniran noted that there the critical need for government to support infrastructure development in the sector being also an investor in the distribution link, adding that without infrastructure that would reduce collection challenges the sector would not be able to fund gas and other links in the sector.

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