Inadequate metering of end-use customers is a major challenge for electricity Distribution Companies (DisCos) in Nigeria. It drives the Aggregate Technical Commercial & Collection (ATC & C) losses in the sector, and those losses often trace back to a lack of financing for buying meters.
Over the years, government and regulators have introduced several interventions to solve the metering crisis. One is the Meter Acquisition Fund (MAF), which the Presidential Metering Initiative (PMI) established. To set out how Tranche A of the MAF will be disbursed, the Nigerian Electricity Regulatory Commission (NERC) issued the Order on the Operationalisation of “Tranche A” of the Meter Acquisition Fund (the Order).
The metering gap behind the Meter Acquisition Fund
NERC reports show that at 31 December 2023, only 5,842,726 customers of the eleven DisCos had meters. That is 44.39% of the registered consumer base of 13,162,572. NERC published the Order on 16 June 2024, and the Order itself puts the metering deficit at seven million customers. The Order builds on the Meter Asset Provider and National Mass Metering Regulations 2021.
Under the Multi-Year Tariff Order 2024, DisCos contribute NGN1.185/kWh to the MAF. Funds available for metering from the April settlement cycle stand at NGN21,864,851,725. Tranche A targets unmetered Band A customers, who will pay nothing for their meters. Because the metering gap is wide, however, Tranche A will not be enough. The MAF revenue stream is therefore meant to give comfort to future lenders to DisCos.
Who can access Tranche A of the Meter Acquisition Fund?
The Order sets eligibility conditions for three entities: DisCos, Local Meter Manufacturers and Assemblers (LMMAs) and Meter Asset Providers (MAPs). Examples include:
- LMMAs: a valid NERC certification for manufacturing energy metering systems or importing knocked-down parts.
- MAPs: a valid MAP permit from NERC and evidence of an arrangement with an LMMA to meet a minimum 30% local content threshold.
- All parties: an API to integrate with the Fund Manager’s IT platform, giving real-time data on installed meters.
DisCo obligations and timelines
DisCos must procure and install meters for unmetered Band A customers in their franchise areas. The Order took effect on 24 June 2024. Within 14 days, DisCos must run a transparent, competitive procurement to set meter prices and select MAPs or LMMAs. Within 20 days, they must send NERC a report on that process for approval. Installation must then finish within 60 days of NERC’s approval, and DisCos must file all supply and installation contracts with NERC.
Payment terms and reporting
If a MAP or LMMA asks for an advance payment and provides a bank guarantee, the Fund Manager pays 30% of the contract sum when the parties sign. Two milestone payments follow, at 60% and 100% completion. Without an advance, three milestone payments apply, at 20%, 60% and 100% of the contracted meters. A MAP or LMMA may also defer payment until installation ends.
The Order also sets reporting duties. The Fund Manager sends NERC a quarterly performance report. DisCos send a meter deployment plan and monthly reports. MAPs and LMMAs send weekly installation reports.
For related reading, see our note on the NERC Delineation Order and our NERC quarterly report summary. To read the full newsletter, use the download button below.
