Agatha Chitumu, Abuja
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DAILY COURIER - As a way of providing meters for customers in the country, the Nigerian Electricity Regulatory Commission, NERC, has announced the approval of N21 billion for 11 electricity Distribution Companies, DisCos,
DisCos, the Commission emphasized shall buy and install the meters for customers under the MAF free of charge.
The new development was contained in NERC’s ORDER NO: NERC/2024/072 on The Operationalization of “Tranche A” of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund.
It reads: “The Commission hereby approves the use of a sum of NGN21,000,000,000 (twenty-one billion Naira only) apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme. Attached to this Order as Schedule 1 is a breakdown of the funds available for each DisCo for the purchase of end-use customer meters.
“All the meters to be procured and installed under the MAF framework shall be at no cost to the customers of the DisCos,” said NERC.
The order signed by NERC Chairman, Engr. Sanusi Garba and Commissioner Legal on 19th January 2024, shall become effective on 13th June 2024 and may be amended or revoked by subsequent Orders issued by the commission.
Recall that NERC introduced the Meter Asset Provider (“MAP”) Regulations 2018 and subsequently, the Meter Asset Provider and National Mass Metering (“MAP&NMMR”) Regulations in 2021 to address metering challenges in the Nigerian Electricity Supply Industry (“NESI“).
The Regulations provided several options for metering end-use customers but the interventions, though significant, have not resulted in the closure of the national metering gap which currently stands more than seven million customers.
The inability of distribution companies (“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 {“MAF”) the scheme was developed and approved by the Commission, primarily to address the challenge of DisCo creditworthiness inhibiting the deployment of end-use meters in NES by creating a credible revenue stream from the market funds on the back of which long-term financing may be secured by the utilities.
NERC said the management of the Fund Manager (“FM”) is based on terms and conditions negotiated by the DisCos and approved by the Commission.
According to the commission, the Federal Government has approved the Presidential Metering Initiative {“PMI”) with the overarching objective of closing the metering gap in the NES! within three years leveraging smart metering technologies for data analytics.
"The MAF shall form one of the revenue streams for the repayment of the long-tenor financing for metering.
“The Commission approved the deregulation of meter prices under the MAP scheme vide Order NERC/2024/040 to ensure on efficient pricing of meters while responding more quickly to changes in macroeconomic parameters.
“The Order provides that all prices of meters under the MAP scheme shall be determined through a transparent and competitive bidding process by eligible MAPs.
"Guarantee (“APG”) issued by a commercial bank in Nigeria is provided by a qualifying MAP/LMMA, 30% of the contract sum shall be paid by the FM on behalf of the DisCo to the MAP/LMMA upon execution of the contract. A further 2 {two) milestone payments shall be made upon the completion of 60% of contracted quantities and 100% of the contract respectively, with the funds advanced against bank guaranteed amortised over the payments", it stated further.
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