Legal Action Blocks 1.55m Smart Meters Under $500m World Bank Loan

The World Bank has warned that a court injunction won by local meter makers is now the biggest threat to Nigeria’s $500 million Distribution Sector Recovery Programme (DISREP), after the legal action stalled procurement of 1.55 million smart meters and prompted multiple deadline extensions.

In its latest Implementation Status and Results Report, the Bank said the programme still holds a “Moderately Satisfactory” rating after recent delivery improvements, but the injunction secured by the Association of Meter Manufacturers of Nigeria (AMMON) on April 30 has become the project’s principal implementation risk.

AMMON, which represents Nigerian meter manufacturers and assemblers, argued that the international procurement framework sidelines domestic producers and undermines local industrial development.

The injunction has prevented the opening of bids for the International Competitive Bidding round (ICB2) for 1.55 million meters, the report said.

The Transmission Company of Nigeria’s project unit has pushed back the bid submission deadline three times, most recently to June 25, 2026, while government agencies continue discussions to resolve the dispute.

The World Bank cautioned that prolonged litigation could force cancellation of the ICB2 procurement to avoid market uncertainty, cost escalation and further programme delays.

Separately, contracts for 217,000 meters to be procured locally through National Competitive Bidding are at an advanced stage after receiving comments from the Attorney General of the Federation.

The Bureau of Public Enterprises (BPE) has linked signing those contracts to the lifting of AMMON’s injunction.

Implementation under the programme’s first international bidding phase is progressing, the report added.

As of June 15, 2026, about 1.23 million smart meters had been manufactured, with 1.03 million shipped to Nigeria and 482,000 installed — up from 365,000 at the time of DISREP’s mid-term review in April.

The Bank pointed to directives issued by the Nigerian Electricity Regulatory Commission in January 2026 as likely to accelerate deployment further.

The programme has delivered other gains: roughly 530,000 people have received direct electricity access through DISREP’s contribution to Mission 300, over three million customers have been mapped under the Geographic Information System initiative, and sector performance indicators show gradual improvement.

The metering gap improved to 57.27 percent and billing efficiency stood at 82.02 percent. Weekly deployment reports showed customer meter installations rose to 379,380 from 265,000 earlier in the year, while direct electricity connections climbed to 418,033 people.

Financially, disbursement remains limited. By June 2026 the World Bank had released $87.34 million of the $500 million facility, about 17.5 per cent.

Under DISREP’s results-based financing element, BPE has begun phased transfers of a $37.5 million advance the Bank released in December 2025 to distribution companies; this funding is tied to revised Performance Improvement Plans, with Port Harcourt, Ibadan and Yola DisCos expected to finalise agreements first.

The report also flagged delays in resolving a contractual dispute between BPE and the programme’s Independent Verification Agent, noting that a revised scope of work is overdue.

Meanwhile, preparation of an additional $308 million financing package is under way, with a concept note completed and peer-reviewed and the World Bank awaiting clearance to move to the Concept Review stage.

DISREP, approved in February 2021, aims to improve the technical and financial performance of electricity distribution companies and runs through May 2028.

The World Bank pointed to Nigeria’s earlier cancellation of $717.7 million in undisbursed funding under the Power Sector Recovery operation as a reminder of the consequences of unresolved sector challenges. If the ICB2 procurement is cancelled because of the injunction, the report warned, DISREP risks another major setback.