Free Meters: Agency Explains how Nigerians will Eventually Pay Via Tariffs
- The BPE says prepaid meter costs are recovered indirectly through electricity tariffs
- Consumers are not required to pay upfront or directly for meter installation
- DisCos dispute the government’s position, citing concerns over cost recovery and installation expenses
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
Electricity consumers in Nigeria will ultimately cover the cost of prepaid meters through tariffs, despite the Federal Government’s insistence that the meters are being installed free of charge, the Bureau of Public Enterprises (BPE) has clarified.
Source: UGC
The explanation comes amid a public disagreement between the federal government and electricity distribution companies (DisCos) over who is responsible for paying for prepaid meters being deployed under World Bank-supported programmes, PUNCH reported.
According to the BPE, while customers are not required to make any direct or upfront payments for meters, the cost of such infrastructure is factored into electricity tariffs over time.
BPE denies DisCos’ claim of 10-year repayment
Speaking in Lagos at the signing ceremony for a N501bn bond issued to address power sector debts, the Director-General of the BPE, Ayo Gbeleyi, said claims that DisCos were being forced to repay meter costs over a 10-year period were misleading.
Gbeleyi explained that all capital investments made by DisCos including meters, transformers and feeders are recovered through the tariff framework approved by regulators. As a result, electricity users eventually pay for these assets indirectly via their electricity bills.
According to him, the federal government’s intervention in the metering programme is backed by a highly concessional World Bank loan, which DisCos are expected to repay over 20 years.
He added that the facility includes a five-year moratorium on principal repayment and a two-year interest moratorium.
BPE boss explains FG’s distribution programme
The BPE boss said the federal government launched the Distribution Sector Recovery Programme with a $500m World Bank loan to improve infrastructure, governance and liquidity in the power sector.
He noted that under the programme, about 3.22 million meters are to be supplied to DisCos. Gbeleyi stressed that consumers are not expected to pay installers or DisCos directly for the meters.
Source: Getty Images
Over 600,000 meters dispatched
He disclosed that more than 600,000 meters have already arrived in Nigeria out of an initial batch of about 1.44 million units, with roughly 75,000 installed so far at no cost to consumers.
He noted that the initiative targets Nigeria’s wide metering gap, currently estimated at about 5.9 million unmetered customers.
He added that the World Bank–supported programme would be complemented by the Presidential Metering Initiative, which is expected to deliver an additional 2.61 million meters.
The clarification follows a directive by the Minister of Power, Adebayo Adelabu, who ordered that meters procured under the World Bank–funded programme must be installed free of charge.
Adelabu warned that any DisCo official or installer found collecting money from consumers would face prosecution.
However, power distribution companies have protested against the directive.
DisCos disagree with FG over free meter distribution
Legit.ng earlier reported that DisCos, in response to the directive from the Minister of Power that prepaid electricity meters be installed for customers at no cost, said it is not feasible .
The electricity operators said the directive does not clarify who will pay for the procurement and installation of meters if given out for free.
Operators noted installers are not DisCo staff and must be paid by someone, adding that the directive is already affecting the Meter Asset Providers scheme.
Source: Legit.ng
