The Central Bank of Nigeria (CBN) has disbursed the sum of N14.35billion to the Distribution Companies of Nigeria (DisCos) for procurement of at least 263,860 meters under the CBN financed National Mass Metering Programme (NMMP).
LEADERSHIP exclusively gathered that the said money which was released on December 24, 2020, represents 100 per cent of all requests received by the CBN from all the Deposit Money Banks (DMBs).
The introduction of the service-based tariff (SBT) in the Nigeria Electricity Supply Industry (NESI) effective from September 1, 2020 lays increased emphasis on the need to close the metering gap in the NESI.
The idea is that the closing of the gap will enhance efficiency of revenue collection by Distribution Companies (DisCos), thereby facilitate meeting their obligations to other upstream market participants.
CBN’s acting director of corporate communications, Mr Osita Nwanisobi, told LEADERSHIP in an exclusive interview: “The total amount disbursed by the CBN under the National Mass Metering Programme was N14.35 billion for 263,860 meters as of December 24, 2020.
“The facility is a loan and the DisCos are the obligors and therefore, they are expected to repay the facility as per agreed amortisation schedule. The repayment is to be deducted from payments made by consumers into the DisCos accounts with the DMBs.”
He said the maximum tenor of the facility is 10 years but not exceeding 2030, while the moratorium on the principal amount is for a period not exceeding 24 months from date of loan disbursement.
According to analysis provided by Nigeria Electricity Regulatory Commission (NERC), the current metering gap in the NESI –based on recent customer enumeration data –is over 10 million, comprising of unmetered customers as well as customers with obsolete meters that need to be replaced.
President Muhammadu Buhari had approved the nationwide mass metering programme implementation to deal with the electricity metering shortfall.
The CBN had in a framework for financing of the mass metering programme in October of 2020 outlined operational modalities of the CBN financing support to the DisCos (Downstream) and Local Meter Manufacturers (Upstream).
The objective of the financing of the programme by the apex bank was to increase Nigeria’s metering rate, eliminate arbitrary estimated billing, strengthen the local meter value chain by increasing local meter manufacturing, assembly and deploying capacity and support Nigeria’s economic recovery by creating jobs in the local meter value chain.
Besides, the move is also targeted at the reduction of collection losses and increasing financial flows to achieve 100 per cent market remittance obligations of the DisCos and improve network monitoring capability and availability of data for market administration and investment decision making.
The framework is divided into three sub-sections: Electricity distribution companies, local meter manufacturers section and additional requirements. Only financial institutions licensed by the CBN to provide banking services in Nigeria are qualified to participate in the programme.
The credit facility is being administered at an “all-in” interest rate of not more than 9 per cent per annum or any other rate as may be specified by CBN.
“As part of the Bank’s COVID-19 relief package, the interest rate to be charged up to 28th February 2021 shall not exceed 5 per cent per annum,” the CBN added in the October 2020 circular. The interest is payable by the loan beneficiaries in accordance with the approved repayment schedule outlined in the transaction documents.
The “all-in” interest rate of 9 per cent is to be shared as follows: participating financial institution – 6 per cent; sponsor (CBN) – 3 per cent.