Stakeholders have expressed mixed feelings over the federal government’s plan to freely distribute six million electricity meters to the estimated 30 million consumers without metres within the next two years as they fear this ambitious growth plan may not be achieved by the electricity distribution companies.
One major line item that is constant in the electricity distribution value chain is the electricity metre. But the irony, however, is that this is in short supply.
It was therefore heartwarming to many people when the federal government unveiled the free distribution of electricity meters last Friday in some parts of the country including Kaduna, Kano, Ikeja and Eko electricity distribution companies franchise areas under the National Mass Metering Programme (NMMP).
The locations to receive the metres to include Bawo Road and its environs in Kano metropolis (KEDCO), Oshodi Business Unit in Ikeja (Ikeja Electric); Yaba and Surulere (Eko Disco) and Governor Road/Tudun Wada in Kaduna (Kaduna Electric).
Confirming this development during a telephone chat with our correspondent, Felix Ofolue, Head of Corporate Communications, Ikeja Electric, said they have since began the first phase of the free distribution across their networks.
“It’s a process and it is expected that every customers would be adequately served. We have six business units in all. Although we began with the Oshodi business unit which extends to Amuwo-Odofin and Ikotun, but the exercise will cascade down to all our networks and impact our customers. The primary objective is to ensure that all our customers are metred at the end of the day.”
Ofolue, who noted that Ikeja Electric had backlog to metres to supply its customers prior to the unveiling of the new scheme, said the delay was due to the global pandemic which imposed restrictions on movement among other factors even as he added that over 100, 000 metres would be distributed during the first phase implementation by year end.
During the flag off programme at the Orile/Ijora Districts in Surulere area of Lagos State, according to new report by the News Agency of Nigeria (NAN), Mr Adeoye Fadeyibi, Managing Director, EKEDC, said that free single and three phase meters would be installed for 100, 000 EKEDC customers in the first phase of the NMMP initiated by the President Muhammadu Buhari’s administration.
According to him, the move is to bridge the metering gap in the country which stands at 59.6 per cent.
He said the programme was being supported by the Lagos State Government and meter manufacturers, Mojec Asset Management Company Limited and Momas Electricity Meters Manufacturing Company Limited.
Fadeyibi said: “The mass metering programme is a welcome development and a boost to the deepening of the Nigeria Electricity Supply Industry (NESI).
“The programme couldn’t have come at a better time than now given the impact of the COVID-19 pandemic on businesses and household income.
“We are happy for the initiative and acknowledge government’s renewed desire to improve the power supply and bridge the metering gap.
“Electricity as we all know is an important essential need of any society and we all have acknowledged the menace of the estimated billing both on the customers and even us as a business.
“It is my belief that with this mass metering initiative we can begin to say we are on a path to better days ahead.
“In the next 18 to 24 months, over six million meters will be distributed across households in the country and for us at Eko, we will be rolling out over 100,000 meters in the next few weeks in the first phase of the programme.’’
He said that all hands must be on deck to support the industry in stamping out energy theft through meter tampering and free riders.
Fadeyibi said the EKEDC would continue to strive to render better services to customers under its operational network and solicited for their support in actualising the objective.
Also, Mr Olalere Odusote, Lagos State Commissioner for Energy and Mineral Resources, said the government has been working with the DisCos to ensure that the whole of Lagos was metered by the end of the current administration.
•Mamman Saleh, Minister of Power
Odusote, however, enjoined the people to pay for energy consumed, noting that this would prevent shortfall in the NESI for the benefit of all stakeholders.
On her part, Ms Chantelle Abdul, Managing Director, Mojec Asset Management Company Limited, said the programme would create jobs for Nigerian youths and keep them off the street.
Pricing of mechanism
According to information obtained from the website of the Eko Electricity Distribution Company (EKEDC), the approved Meter Prices under MAP framework for Single Phase is N44,896.17 while Three Phase goes for N82,855.19 with a disclaimer notice that meters provided or purchased under the Meter Asset Provider Framework cannot be moved from the property by the customer.
ome of the registered MAPs in EKEDP are Mojec International Limited, Bendoricks International Limited, CIG Metering Assets Nigeria Limited, Integrated Resources Limited, Armese Consulting Limited, Turbo Energy Limited and Gospell Digital Tech. Limited
It may be recalled that the Nigerian Electricity Regulatory Commission (NERC) had announced that electricity customers will henceforth cease to make one-off payment for meters but rather will pay for them via periodic tariff costs,
A reward system that will compensate those who have acquired meters from their own purse is also in the pipeline.
Nathan Rogers Shatti, the NERC Commissioner, told stakeholders and industry think tank at a virtual session on Wednesday of the imperative of adopting a tariff and billing that will be determined by quality assurance and delivery.
“There would be a new mechanism for people who used their money to buy their own meters. There have been delays in the implementation; all those who paid for their own meters will be compensated,” Shatti said.
Mass meter for all
In the federal government’s quest for mass metring of every unmetred Nigerian, investigation by The Nation revealed that the Central Bank of Nigeria, on October 18, approved guidelines for funding the mass metering programme which entailed that all meters under the scheme will be locally sourced, creating thousands of manufacturing jobs through lead manufacturers such as MOMAS, MOJEC and others.
Laolu Akande, the senior special assistant to the vice president on media and publicity, also has confirmed the development.
He said “current efforts by the Federal Government on improving power supply and mass metering is in line with some of the agreements recently reached between the Federal Government and the organised labour.
“Recall that President Muhammadu Buhari had committed that Nigerians would be metered before the end of his administration and that estimated billing would be ended.”
The Nigerian government had promised to install one million metres by year end to close up the humongous metring gap in the distribution segment of the power value chain.
Not yet Uhuru
For many stakeholders laudable as the growth plan is, it is too early in the day to roll out the drums and cymbals to celebrate as expectations still need to be managed since this is not the first time such promises would be made and not fulfilled.
The Meter Asset Provider (MAP) framework is a regulation issued by the Nigerian Electricity Regulatory Commission (NERC). It is designed to fast track a closure of the end-user metering gap with a goal of eliminating the practice of “estimated billing” excepting exceptional cases envisaged under the regulation. The framework mandates that the distribution companies engage meter suppliers also known as Meter asset providers to provide meters to end users in their service areas. Meters provided under the MAP framework will be maintained by the asset providers under the warranty period of 10-15 years. The tariff cost for Meters under the MAP framework would be at a reduced rate. However, customers will be mandated to pay a maintenance fee for the warranty period indicated
•Fadeyibi
However, while attempting a cursory review of the 2018 Metre Asset Provider Regulations (MAP) the duo of Ishaya Amaza and Crystal Okwurionu, who are both analysts at üLEX, a leading commercial & dispute resolution law firm, recalled that following the enactment of the Electric Power Sector Reform Act (EPSRA) in 2005 and the subsequent privatisation of Nigeria’s electricity sector in 2013, the provision of meters to electricity customers to ensure efficient billing and collection of electricity tariffs became the statutory responsibility of the electricity distribution companies but lamented that the DisCos were unable to finance the acquisition and installation of metres, which in turn has allowed high commercial and collection losses to continue to plague the nation’s electricity sector.
Thus the DisCos have perpetuated the practice of billing electricity customers on an estimated basis and not on the basis of actual electricity consumed.
Raising a poser, Egbayelo Fehintola Charles said, “How is government going to monitor electricity company is what they are yet to explain?”
While reacting to the planned free distribution of metres, Olabunmi Sadiq argued that he had always considered the whole idea of making consumers pay for metres as a serious anomaly. “It’s akin to asking a customer pay for PMS meters of Measuring Scale for a woman selling frozen turkey. The government has failed to protect the masses, leaving us at the mercy of DISCOS owners who were virtually gifted the DISCOs in the first place.”
On his part, Joshua Ojo said, it smacked of irresponsibility on the part of DISCOS to shirk their responsibility, saying that it remains to be seen whether the new policy regime of mass metring will be implemented to the letter.
“How can they continue to run away from their responsibilities to consumers? They are supposed to be responsible for the provision of everything required to get power to the consumers. The consumers have been exploited for too long and this has to stop.”
Enter private sector financing
In the view of analysts, paucity of funds has remained a sour point in the federal government’s quest to provide metre for all Nigerians.
However, financing the metering gap will require about US$1billion. Since the full implementation of the MAP regulation in 2019, more than a quarter of a million prepaid meters have been financed by MAPs, despite a number of fiscal constraints that have hindered the implementation, such as the introduction of a 35% import levy on prepaid meters. To fast-track the mass roll-out of prepaid meters, the President Muhammadu Buhari administration recently granted a one-year waiver of the 35% import levy. In addition, the government is making financing available through the CBN to local meter manufacturers and MAPs for bulk procurement of prepaid meters.
MAPCo intends to bridge the huge metering gap in the Nigerian power sector by providing liquidity to Meter Asset Providers (MAP) under a securitization structure. MAPCo will enter into finance and purchase agreements with MAPs and DisCos to purchase their prepaid meter assets, and subsequently offer the receivables from these meter assets to the Capital Markets.
MAPCo will be established as a special purpose PPP vehicle, with the principal objective of raising long-term equity and debt funding from both domestic and foreign capital markets to purchase the meter assets from MAPs. In other words, MAPCo will re-finance the MAPs. The SPV will however be driven by substantial private sector participation consisting of a mix of institutional investors such as private equity investors, insurance companies, Pension funds administrators, willing electricity distribution utilities and international financial institutions. The Nigerian government may co-invest in the vehicle through either the Central Bank of Nigeria, the Ministry of Power, or the Ministry of Finance.
Commenting on the MAPCo SPV, Odion Omonfoman, the chief executive officer of New Hampshire Capital said “MAPCo is proposed to be a key component of the Nigeria Power Sector Recovery Program (PSRP) to put the power sector on the path of sustainability and improved electricity services to Nigerians. The SPV will support the mass roll-out prepaid meters to unmetered electricity consumers and also enable MAPs provide smart metering solutions to Discos and their consumers using the Meter-as-a-Service (MaaS) business model.”
Commenting on the SPV, Oluseun Olatidoye, the Head, Capital Markets of FBNQuest Merchant Bank stated that “the MAPCo SPV will enhance the long term viability of Nigeria’s power sector by leveraging on the depth of the Nigerian capital markets and offer investors unique access to long term investment opportunities through securitization of future receivables backed by the prepaid meter assets. FBNQuest is delighted to be one of the sponsors of this very important SPV in the power sector.”
Ewaen Imohe, CEO of Kairos Investments Africa noted that “the SPV will create and issue financial securities that are backed by prepaid meter assets in the power sector. Given the stable and long useful life of the underlying pool of prepaid meter assets backing the financial securities, we anticipate that there will be a lot of interest from long term investors looking to diversify their investment portfolios. We are proud to be partnering with New Hampshire and FBNQuest on this very important initiative.”
