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Nigeria’s tedious, costly search for a suitable metering scheme

By Kehinde Olatunji
09 December 2020   |   3:13 am
With the commencement of the distribution of six million free pre-paid electricity meters to Nigerians through the National Mass Metering Programme (NMMP), there are concerns about the conflicting nature of the programme with the Meter Asset Provider scheme ....

PHOTO: Nigeria Electricity Hub

With the commencement of the distribution of six million free pre-paid electricity meters to Nigerians through the National Mass Metering Programme (NMMP), there are concerns about the conflicting nature of the programme with the Meter Asset Provider scheme (MAPs), as consumers are torn between unclear choices.

According to stakeholders, the NMMP is being unveiled at a time when the MAP scheme has yet to be properly assessed, as many consumers and meter manufacturers with commitment to MAP were yet to receive their meters before a new programme was being introduced.

The MAP scheme was issued by the Nigerian Electricity Regulatory Commission (NERC), to fast-track the closure of the metering gap as well as the elimination of “estimated billing.”

Considering how electricity consumers are being billed by the Distribution Companies (DisCos), the Federal Government introduced NMMP to increase the country’s metering rate, eliminate estimated billing and strengthen the local meter value chain by increasing local manufacturing, assembly and deployment capacity.

Under the Presidential Mass Metering Initiative, the government is making funds available to the DisCos to roll out one million meters in the first phase, at no cost to consumers, with deployment starting in Kano, Kaduna, Lagos and Abuja.

According to a report by the African Media Agency on behalf of FBNQuest, with an estimated metering gap of more than eight million nationwide, the plight of unmetered consumers continues to deteriorate especially as regards indiscriminate and unfair estimated billing.

“This plight has been a perennial issue that heralded the privatization of the power sector. Therefore, in response to the aforementioned issues, the present regime of President Muhammadu Buhari announced plans to ensure that the eight million metering gap is closed within a two- year period. Owing to a deficit of about $1billion in financing the metering gap, the Nigerian Electricity regulatory body issued the MAP regulation in 2018,” the report read in part.

The report noted that the MAP regulation has enabled a bankable structure to raise the required financing to close the metering gap, adding that 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.

The Federal Government had explained that the metering initiative will help to fully meet the 6.5 million meters nationwide and will impact an estimated 30 million consumers.

It emphasised that NMMP is totally different from MAPs, hence, those who had paid for meters under the latter would not be serviced under the former.

Chief Executive Officer and Managing Director of Eko DisCo, Adeoye Fadeyibi, stressed that recipients of the NMMP would not pay for the meters that would be installed in their homes.

Fadeyibi added that consumers who had paid under MAPs would not be serviced with the free meters, but assured that discussions were ongoing on how they would be sorted.

He said: “Those who have paid under MAPs did not do so illegally; it was done under a legal programme. MAPs were ordered and put in place by the NERC and so it is real. While I understand the complaints and the feelings, I also want everybody to understand that there are people under NMMP employed to provide the free services. We have been in discussions with the federal government and all other stakeholders to deliberate on how to manage those who had paid for meters under MAPs.

“We cannot attend to them first under the NMMP programme because it was paid for by the Federal Government. But, I can assure you that they would also get meters. There is a commitment by MAPs to provide meters and it is a different programme. Whatever is the delay, whether shipment or Covid-19, whatever it is, those particular MAPs will explain that to the DisCos and regulators. The discussions are already ongoing.”

But, Ibadan Electricity Distribution Company (IBEDC), however, contradicted this position as the Chief Operating Officer of the company, John Ayodele, said those who had paid under MAPs would be provided with the NMMP free meters.

“For the first phase of the programme, which will run till the end of December 2020, IBEDC is rolling out over 100,000 prepaid meters to customers, including those who are duly registered, had passed the technical evaluation and paid under the Meter Asset Provider Scheme (MAPS), Ayodele said.”

The action of IBEDC is believed, might undermine the purpose of the NMMP. Many believe that the mass metering initiative will go a long way in reducing the challenges in the power supply value chain, and possibly eliminate the estimated billing system.

Currently, electricity consumers experience a lot of problems, which include outrageous bills and unstable power supply. Electricity consumers, who had paid for meters under MAPs and are awaiting the arrival of their meters, are complaining of outrageous billings by the DisCos amid questions on when their meters would be delivered.

Mrs. Temitope Okubanjo who lives at Oke-Afa, Lagos State, under Ikeja Electricity Distribution Company (IKEDC), decried that she had paid for a pre-paid meter since October, and was yet to receive the product.

“Another scenario playing out is that some of the marketers of IKEDC now bill an awaiting pre-paid meter owner by putting an estimated bill on a new line just created.

“While I await IKEDC to bring my meter, after making payment, the new line created for me by the marketers has started reading. Within the space of three months, while awaiting the pre-paid meter, the new line created had attracted an estimated billing of N55,350. Specifically, in August, I was billed N10,000; in September, I was given N18,000.

“When the marketer was contacted, as usual, he promised to look into it, but nothing has been done. By October ending, another bill was slammed on the line, about N37, 350. As it is, I have not been metered, yet the bill has been on the rise,” she said.

Also, Olajide Kayode, who lives at Mile 12, under IKEDC jurisdiction lamented that he had paid for the pre-paid metre in September 2020 and was yet to collect the product.

He complained that his electricity bill has been outrageous, while urging the DisCo to expedite action to deliver his prepaid metre.

“In September, I paid N48, 265 to Providus Bank for a pre-paid meter. Since then, I haven’t heard from them. All efforts to reach the DisCo through their officials to bring my prepaid have been abortive as they claimed that the meter has not been delivered to them.”

Another consumer, Precious Tayo, who had paid for a prepaid meter, urged Ikeja Electric to deliver her pre-paid meter.

“I need to voice out, the power supply in my area is poor and I don’t even stay up to eight hours at home. This estimated bill is killing me. I have paid for a pre-paid meter for over three months.”

Her payment confirmation for single-phase meter payment reads: “Please be informed that your meter payment has been received and be assured your meter would be installed. We appeal to you to exercise a little patience, as we are currently experiencing supply delays due to importing process challenges. We thank you in advance for your understanding.”

However, Head of Corporate Communications, Ikeja Electric, Felix Ofolue, told The Guardian that metering of customers under the MAPs category is currently ongoing, saying: “It should be closed out in the next six weeks.”

Also, General Manager, Corporate Communications, EKEDC, Godwin Idemudia, said: “Those who are still on board and will benefit from MAPs. For our customers that have paid for MAPs, they will not be left behind.

“The free meter programme also runs as announced with those who registered for the programme on a first come first serve basis with major attention to the bands as stipulated.”

Meanwhile, FBNQuest Merchant Bank has announced plans with Kairos Investment Africa and New Hampshire Capital for a national meter asset finance and management SPV (MAPCo).

This is aimed at attracting long-term finance for the mass rollout of prepaid smart meters to millions of electricity consumers in Nigeria who currently are not metered by the electricity distribution companies (DisCos).

The report by the African Media Agency stressed that to fast-track the mass roll-out of prepaid meters, the Buhari administration granted a one-year waiver of the 35 per cent import levy. In addition, the government is making financing available through the Nigerian Central Bank to local meter manufacturers and MAPs for bulk procurement of prepaid meters.

Commenting on the proposed deal, chief executive officer of New Hampshire Capital, Odion Omonfoman, said: “MAPCo is proposed to be a key component of the Nigeria Power Sector Recovery Programme (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 to provide smart metering solutions to Discos and their consumers using the Meter-as-a-Service (MaaS) business model.”

Head, Capital Markets of FBNQuest Merchant Bank, Oluseun Olatidoye, stated: “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.”

CEO of Kairos Investments Africa, Ewaen Imohe, 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.”

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