October 6, 2023/CSL Research
According to a news report, the federal government is set to distribute 1.25 smart meters to electricity consumers under the Phase 2 of the National Mass Metering Programme (NMMP). The special adviser to President Bola Tinubu on energy, Olu A. Verheijen made this known yesterday, noting that the procurement process for the phase is starting this month. He reiterated the FG’s commitment to end estimated billing which Nigerians have complained about for decades and ensuring cost reflective tariff.
Recall that the NMMP was launched in August 2020, in line with a presidential directive to ensure that all Nigerians receiving electricity from the national grid are metered. The project was planned to deploy six million meters nationwide in three Phases 0, 1 and 2. However, checks revealed that the project was derailed as paucity of funds stalled the execution of Phase 1 of the project. Under phase zero of the metering project, only about 980,000 meters were deployed.
Another 4million meters was planned to be distributed in the second phase with a World Bank facility expected to fund 1.25 million metres. The World Bank facility is a US$500 million World Bank loan comprising US$155 million for the procurement and supply of smart meters and US$345 million as loan to the 11 distribution companies for the upgrade of the distribution network in the country.
Ineffective metering has been a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they have not consumed through estimated billing by discos. Discos have been largely unsuccessful with metering their customers. As far as inadequate metering is concerned, Discos, over time, have used this situation to their advantage via estimated billings.
The Meter Asset Provider (MAP) Regulation, which became effective on April 3, 2018, introduced meter asset providers as a new set of service providers in the Nigerian Electricity Supply Industry. However, the request for payment before the provision and installation of Meters was a disincentive for the mass adoption of prepaid meters despite the known benefits, giving rise to the CBN sponsored mass metering plan.
At the start of the program, the metering gap was estimated at about 9.8 million meters, and about one million meters were distributed in the first phase. Allegations of fraud and paucity of funds have stalled the execution of the project in the past. In our view, with a new Minister for power, activities may move faster now.
