The Federal Government has taken a significant step towards addressing the longstanding issue of estimated billing in Nigeria’s electricity sector. In a recent announcement, the Minister of Power, Adebayo Adelabu, revealed that the government and the states have collectively raised a substantial sum of ₦100 billion for the procurement of prepaid electricity meter.
This initiative, known as the Presidential Meter Initiative (PMI), is a crucial component of President Bola Tinubu’s administration’s efforts to close the significant meter gap in the country. As the minister explained, many electricity customers have been paying estimated bills due to the lack of meters, leading to widespread dissatisfaction and mistrust in the power distribution companies (DisCos).
“Out of over 12 million electricity customers in Nigeria, only a little over five million are metered,” Adelabu emphasized. “This means we have a meter gap of over seven million, and this is a self-inflicted problem.”
The PMI aims to install a minimum of two million meters per year over the next five years. To achieve this ambitious goal, the government has been actively seeking funding from various sources, including the federal and state governments as well as international financial institutions.
“In the PMI, we have made good progress in sourcing the fund for this,” Adelabu stated. “Today, we have received and we have seen about N100 billion that will go into the procurement of meters.”
World Bank Support
In addition to the domestic funding, the World Bank has pledged its support to Nigeria by providing almost two million meters over the next two years through the Distribution Sector Recovery Program (DISREP). The World Bank’s contribution, amounting to $200 million out of the total $500 million DISREP fund, will be utilized specifically for meter procurement.
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“In fact, for the World Bank, we have issued contract awards,” the minister disclosed. “It’s just for them to start bringing the meters from overseas and locally.”
To ensure a mix of domestic and international supply, the government is procuring meters through a combination of international and national competitive bidding. This approach will help to leverage the best prices and ensure that the meters meet the required quality standards.
“So it’s a combination of international competitive bidding and national competitive bidding,” Adelabu explained. “Before the end of the year, they will start bringing the meters in.”
Liberalisation of Electricity Meter Market
Another important aspect of the PMI is the liberalization of the meter market. The government has taken steps to allow DisCos to purchase meters directly from vendors, thereby increasing competition and potentially reducing prices for consumers.
However, the minister acknowledged that the cost of meters has been on the rise due to factors such as exchange rate fluctuations. “The meter that was going for N80,000 before probably is about N120,000 now,” he noted. “That’s the reality. What now matters most is the funding of this.”
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If You Ask Me
The successful implementation of the PMI is expected to have a significant impact on the Nigerian electricity sector. By closing the meter gap and ensuring accurate billing, the initiative will promote transparency, enhance customer satisfaction, and improve the overall efficiency of the power distribution system.
