Nigeria’s apex bank, Central Bank of Nigeria (CBN) has rolled out a framework for financing the National Mass Metering Programme (NMMP) recently implemented by the federal government.
The framework is expected to close the metering gap of over 10 million customers in the country.
The framework outlines the operational modalities of the CBN financing support to the power distribution companies (Discos) and local meter manufacturers
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According to the CBN, the introduction of the service-based tariff (SBT) in the Nigeria Electricity Supply Industry (NESI) effective from 1st September 2020 has put increased emphasis on the need to close the metering gap in the NESI.
The Bank said that the closing of this gap will enhance efficiency of revenue collection by distribution companies (Discos) and thereby facilitate meeting their obligations to other upstream market participants.
The objectives of the framework, according to the apex bank are “to increase Nigeria’s metering rate; Elimination of arbitrary estimated billing; Strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity.
Others are to Support Nigeria’s economic recovery by creating jobs in the local meter value chain; Reduction of collection losses and increasing financial flows to achieve 100 percent market remittance obligations of the DISCOs; and Improve network monitoring capability and availability of data for market administration and investment decision making.”
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The facility shall be administered at an “all-in” interest rate of not more than 9.0% per annum or any other rate as may be specified by CBN. As part of the bank’s Covid-19 relief package, the interest rate to be charged up to 28th February 2021 shall not exceed five percent per annum.
The CBN said: “Procurement of fully assembled meters from overseas is prohibited except meters imported by Meter Asset Providers (MAP) already in the country as at September 30, 2020 and verified by NERC; and importation of related metering infrastructure that are currently being produced in the country is also prohibited.”
Observers have said that the current move may boost commercial value of the nation’s electricity industry through increased tariff, and that it may spark off inflow of fresh bank credits to the sector.
This is also coming at the backdrop of another plan by private financial groups to raise about N480 billion credit facility for meter acquisitions across the electricity value chain.
By Chibisi Ohakah, Abuja
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