The Nigerian government has directed that each of the 11 Electricity distribution companies across the nation must be prepared to receive and distribute a minimum of 6,100 megawatts of electricity within the next six months. The Minister of Power, Adebayo Adelabu, outlined the government’s intention to obtain between ₦250 billion and ₦300 billion in funding each year for the next four to five years in order to address the existing metering deficit of over seven million in the country.
During his visit to Eko Electricity Distribution Company (EKEDC) in Lagos and Momas Electricity Meters Manufacturing Company Limited (MEMMCOL) in Ogun State over the weekend, Adelabu disclosed that the government planned to secure a ₦75-billion fund. The fund would consist of seed capital from President Bola Tinubu’s administration, as well as additional debt capital injections from the Nigeria Sovereign Investment Authority (NSIA). He announced that a new bill was in progress to implement a local content law specifically for the energy industry.
MEMMCOL will deliver about 2.5 million prepaid meters annually.
During a speech at the Eko Disco headquarters, Adelabu emphasised the importance of Discos being ready to handle up to 6,100MW of electricity. This requirement stemmed from successful system stress tests conducted by the Transmission Company of Nigeria (TCN), which showed its capability to transmit over 8,100MW. Additionally, plans for a partial Sovereign Risk Guarantee (SRG) were discussed as a means to boost the capacity of generation companies (Gencos). Adelabu announced a new strategic plan to use Eko and Ikeja Discos as examples of improved collection and service quality, surpassing expectations.
Also, he plans to pilot test effective supply methods using these two Discos before implementing them across the entire sector in the coming months. He noted that other companies should look to Eko and Ikeja Discos as models to follow. Yet, Adelabu mentioned at the MEMMCOL meter factory in Ogun that the government aimed to deliver approximately 2.5 million prepaid meters annually to address the country’s metering deficit as part of President Tinubu’s Renewed Hope Agenda.
A new bill will boost local original equipment manufacturers.
He mentioned that this approach would assist the government in advancing the strategy of using locally produced goods instead of imports in the power industry and promoting backward integration through technical training initiatives. He also emphasised the present government’s dedication to aiding local Original Equipment Manufacturers (OEMs) by drafting a bill that would boost local content in the power sector. The Presidential Metering Initiative aims to bridge the significant metering gap in the power sector by installing a minimum of 2 million to 2.5 million meters annually for the next five years.
Emphasising the need for collaboration among all stakeholders to substantially reduce the issue, the minister acknowledged that complete closure may not be achievable due to new connections. Working together with the government, all parties must take responsibility for both causing and fixing the sector’s decline. He believed that by implementing these initiatives, Investors would be more willing to invest their financial resources in creating new regional industries. They have the option to prioritise local participation in both their projects and contractual agreements within the power sector.
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Lastly, the current focus is on developing Legislation that will mandate local involvement in the power sector, mirroring the Oil and Gas Industry regulations. Supporting local producers is the key to their mission. That’s why they’ve made it a point to be here. Mr. Kola Balogun, the Chairman of MEMMCOL, expressed gratitude to Adelabu in his earlier dialogue with the minister for his dedication and bravery in addressing the challenges in the power sector. Balogun highlighted the high demand for prepaid meters in Nigeria compared to other African countries and emphasised the importance of local support in reaching the necessary Investment level.