Nigeria’s US$17m metering fund vanishes as discos default on privatisation pledge

Posted by: Metering International

July 2, 2014

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Nigeria’s energy watchdog Nigerian Electricity Regulatory Commission (NERC) revealed last week that N2.9 billion (US$17m) of Federal funds earmarked for a national metering scheme are unaccounted for in a “crime against consumers”, according to NERC Chairman Dr Sam Amadi.

Dr Amadi has confirmed that the metering intervention fund, created in 2011, has not achieved it aims of helping to subsidise metering rollouts to the millions of customers without units due to mismanagement by the new electricity distribution companies (discos) created by the privatisation of Nigeria’s power sector.

Amadi said: “The money was given to the discos before NERC came on board.

“We told them (the discos) to submit a report on how the money was spent, and only half of the discos have. For those that submitted, their books were not convincing, so we disallowed them.”

No funds

NERC plans to prosecute “those who got the money” but given that some discos are reporting a crisis in funding, this might be ambitious.

Metering.com reported in early June 2014 that an industry source stated some discos are reluctant to deploy prepaid meters to consumers because estimated billing, to which many electricity consumers are subjected due to lack of prepaid meters, is helping their revenue base.

Manufacturing hindered

Nigeria has an estimated deficit of 4 million meters and the metering market is also hindered by a federal government ruling that only the new discos can buy directly from manufacturers.

Managing director of Nigeria’s Momas Electricity Meters Manufacturing Company, Kola Balogun, said: “It is policy that is making the market inactive.

“If we can sell meters to estate owners directly, it will open up a little market.”

Under the purchasing agreements, the only exception permitted to the meter-buying regulation is when a disco gives work orders to a vendor, who can then purchase directly from the manufacturers.

Balogun estimates the market is so huge that the metering gap can not be bridged in two to three years.

Government initiative

In May 2013, the regulator, Nigerian Electricity Regulatory Commission (NERC) introduced a new metering scheme, the Credited Advance Payment for Metering Implementation (CAPMI), to address the slow pace of customer metering by the discos as well as the high level of customer complaints.

CAPMI provides a platform for willing customers to pay the cost of the meter into a dedicated account jointly managed by the disco and meter vendor/installer.

Under the scheme, once payment has been made, customers would have their meters installed within 45 days by a NERC-accredited vendor/installer.

A number of the new investors including Eko, Kaduna and Abuja discos are believed to be implementing the scheme.

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