Nigeria has initiated plans to move electricity users connected to the national grid to prepaid meters. But the Federal Government is yet to achieve its metering target. Now, the World Bank has pledged to support Nigerian power sector reforms with 1.2 million meters to help the nation close its metering gap. The support is expected to kickstart the Federal Government’s mass metering program which seeks to stop estimated billing. Estimated billing is a system of charging unmetered electricity consumers for electrical energy consumed based on their previous usage, without considering the actual quantity of energy consumed.
Because of that, consumers on the estimated billing platform are mandated to pay far above what they use in a month. This is why metering every household and business is essential. But with over seven million consumers yet to be metered, FG’s mass metering program, which was designed to close the gap, had met a deadlock after controversies and allegations of corruption marred its first phase. The number of metered electricity customers in Nigeria stood at 5.47 million in the second quarter (Q2) 2023, indicating a growth of 10.4 percent from the 4.96 million reported in Q2 2022.
Five hundred million will be provided by World Bank for the project.
On a quarter-on-quarter basis, the growth was only 3.1 percent from 5.31 million recorded in the preceding quarter. On October 5, 2023, bidders jostling to provide meters packed out a hall at the Transmission Company of Nigeria (TCN) in the Wuse Area of the Federal Capital Territory (FCT). The Federal Government, at the event, emphasized that the initiative was committed to delivering reliable and cleaner electricity to Nigerian people and businesses. Assistant General Manager in charge of World Bank Projects at TCN, Tukur Bamali, while speaking at the forum, said that the reform would improve the performance of distribution companies (DisCos).
According to him, over $500 million is being provided by the World Bank for the project. A sum of $150 million will be expended on metering across eleven distribution companies, while $350 million will be given to DisCos directly to improve power supply. The project would take about 18 months after the bidding process had ended and contracts were signed with suppliers, Bamali said, adding that it would be rounded off around the first quarter of 2025.
FG has been engaging Nigeria apex bank without results.
He said that four million meters under phase one were on track. Bamali also affirmed that there was a need to consistently provide meters to consumers to end the estimated billing of end users. It has been reported that the Nigerian government has been engaging with the Central Bank of Nigeria (CBN), which has been unable to provide the N200 billion required from the government for the project. Also, the World Bank has been supporting Nigerian power sector through the Power Sector Recovery Programme (PSRP), which has seen about $500 million lent to support the ailing sector.
Besides, a discussion on a $1.5 billion loan is ongoing between the bank and the Nigerian government. According to a World Bank report, Nigeria has the world’s largest absolute electricity access deficit. Lack of access to the electricity grid affects 45 per cent of the population (90 million people), making Nigeria the country with the largest number of people not connected to electricity. As such, Nigeria accounts for 12 percent of the global access deficit.
NMMP’s overall objective is to provide meters for all consumers.
Overall, the National Mass Metering Programme is part of the Federal Government’s effort to further bridge the country’s metering gap and also cushion the effect of the Service Reflective Tariff on electricity consumers in Nigeria. The Federal Government and the distribution companies’ initiative involves both entities collaborating with local meter manufacturers as well as other stakeholders to provide prepaid meters to consumers. The objective of the program is to accelerate the rate of metering in Nigeria and stop estimated billing.
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