September 25, 2024/CSL Research
According to a recent This Day report, which cites data from the Nigerian Electricity Regulatory Commission (NERC), only 115,767 electricity customers in Nigeria received metering devices between April and July. Out of the 13,293,739 registered electricity customers nationwide, the data revealed that as of July, only 6,053,497 homes and offices had been metered. This leaves over 7.24 million Nigerian electricity consumers without metering devices in their homes and workplaces. The NERC data also highlighted that meter-related issues accounted for the highest number of customer complaints during the four-month period under review.
Ineffective metering remains 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.
The Federal Government launched the National Mass Metering Programme (NMMP) in 2020 and the CBN, in October of the same year, issued the Framework for its financing. The initiative is geared towards mass metering of Nigerians by providing loan facilities to (i) the DisCos (for the procurement of meters for its customers), and (ii) the local meter Manufacturers (for the manufacturing and assembling of meters). The purchase price of the meter is to be programmed into the prepaid meter allowing consumers to collect the meter for free whilst the cost is spread and billed into the tariffs payable by such consumers.
Under the NMMP, meters are to be deployed in multiple phases with the supply of 1m meters in the first phase which was completed in Q3 2021. Another 4m units of prepaid meters is to be deployed under phase 2 of the NMMP in 2023. 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. The project was planned to deploy six million meters nationwide in three Phases 0, 1 and 2.
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. However, allegations of fraud, unfair treatment of local manufacturers and paucity of funds appears to be stalling the execution of the project.
