The Nigerian government announced on Friday its plan to procure 3.5 million electricity meters by the end of the year to improve revenue for its cash-strapped power sector, where more than half of the customers are billed by estimates.
The Minister of Power, Adebayo Adelabu stated that most of the supply would be sourced from international vendors, while a smaller quantity is expected to come from local manufacturers due to their limited capacity. Chinese companies have frequently supplied meters to Nigeria.
He made these remarks during an energy conference organized by BusinessDay Newspapers.
He said, “This year 2 million meters would be procured plus the 1.5 million meters being procured with World Bank support. We are going to have 3.5 million meters installed by the year-end,”
The minister added that competitive bidding for the first batch of 1.5 million meters has already been concluded, with delivery expected within months.
He also mentioned that the government has agreed to release 20 billion naira to electricity distribution companies to procure meters for large users, whose tariffs were raised in April. This will ensure they are all metered by September.
Nigeria’s metering gap
The current Minister of Power, Bayo Adelabu, estimates the number of unmetered customers in the country to be between 7 and 8 million.
- However, a PwC analysis suggests a much higher figure, estimating 38.91 million unmetered customers. The report hypothesizes that around 50% of Nigeria’s installed meters are either obsolete or faulty, representing 1.7 million customers, 4.09 million unmetered, and 33.1 million unconnected potential customers.
- According to the NERC in 2023, the overall metering rate across all DisCos was 44.51%. Ikeja DisCo had the highest metering rate at 72.0%, while Yola DisCo recorded the lowest at 18%.
- Out of 12.82 million customers, approximately 5.70 million were metered, leaving 7.11 million consumers unmetered. This represents a metering gap of 55.49% as of September 30, 2023.
- Customers without meters are required to pay a fixed, estimated charge, regardless of the erratic supply from the aging grid. Last year, 57% of all complaints received were about disputed bills, according to a report by the Nigerian Electricity Regulatory Commission (NERC).
World Bank loan for electricity sector
Recently, the federal government secured a $500 million World Bank facility to improve the power sector part of which will be channelled into providing meters for electricity consumers.
The Bureau of Public Enterprise (BPE) announced that the World Bank approved the loan in 2021. It was included in the government’s borrowing plan this month after certain milestones were achieved.