June 18, 2024
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ELECTRICITY

Nigerian Govt Approves N344bn Five-Year Metering Expenditure for DisCos

The Nigerian Government has approved N344 billion in metering Capital Expenditure for Electricity Distribution Companies (DisCos) to bridge the metering gap within five years.

In a breakdown, N6.25 billion is approved annually for each of the DisCos to deploy 65,000 end-use meters from 2023 to 2027.

According to the 2024 Multi-Year Tariff Order, the move is geared towards phasing out the use of estimated billing methodologies within its network.

In addition to the DisCos’ metering plan, the Order also makes provision for the accruing of funds to the Meter Acquisition Fund (MAF) established to support the deployment of end-user customer meters.

“The MAF shall be centrally managed and used as securitisation for long-term financing to facilitate the rapid closure of the current metering gap in the NESI,” it said.

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Currently, the metering gap according to industry data is put at an approximated 7 million out of 12.6 million registered electricity customers, according to the Nigerian Electricity Regulatory Commission(NERC).

However, Nigerian Tribune reports that the Commission said it may review the amount provided for MAF contribution during periodic minor reviews to reflect changes in the administration of the MAF and other macroeconomic variables.

NERC had in its quarterly reports attributed the overall decline in DisCos’ collection efficiency to the decline in metering electricity consumers.

“DisCos continue to implement various collection campaigns to improve remittance for post-paid customers.

“However, their low collection efficiency is a threat to the NESI’s financial sustainability. To address this the Commission plans to enhance its monitoring of metering programmes, such as the National Mass Metering Program (NMMP) funded by the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme, being implemented by DisCos,” it said.

Although tariff review is inevitable, this may further affect collections if ” the DisCos refuse to evaluate options for improving the optimisation of their energy delivery in line with the Service Based Tariff (SBT) regime,” says NERC.

The government has, through various interventions, sought to close the metering gaps such as the Meter Asset Provider (MAP), the National Mass Metering Programme (NMMP).

The NMMP is a policy intervention by the government, with funding from the Central Bank of Nigeria (CBN) meters are provided free of charge to customers but as loans to the electricity distribution companies (DisCos).

On the other hand, the MAP scheme which was approved in 2018, is available to customers who are not willing to wait for the availability of meters under the NMMP.

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