Eight Nigerian banks partner power firm to bankroll 5m electricity meter roll-out
London, May 28, 2019 (AltAfrica)-Nigerians may soon heave a sigh of relief as the five million metering gap in the distribution arm of the power sector could be filled soon as some banks and operators are collaborating to provide meters to consumers.
The initiative which is the Meter Asset Provider (MAP) scheme was initiated by the Ministry of Power, Works and Housing and approved by the Nigerian Electricity Regulatory Commission (NERC). The MAPs will provide, install, maintain customers’ meters and end estimated billing.
According to the regulation guiding MAP operation, a MAP must install a customer’s meter within 10 days of payment for such meter and the operators of the scheme must meter unmetered electricity users in Nigeria within three years from the month of May.
For consumers, in Nigeria’s electricity market, it has been tale of woes as they are slammed huge estimated bills on a monthly basis.
Minister of Power Works and Housing, Mr. Babatunde Fashola, last year, shocked most Nigerians when he said the 11 Discos would need about N220 billion to provide prepaid meter to power consumers.
Regrettably, Nigerians have had to bear the brunt of the inefficiencies of the Discos by paying about N3 billion monthly in estimated billing as a result of the absence of a robust metering plan. The inability of the Discos to meter every household has been further compounded by liquidity challenges and difficulties in accessing credit lifeline from banks to purchase meters.
Mojec, banks collaborate
Mojec Meter Assets Management Company, a subsidiary of Mojec International Limited, and also one of the 36 selected MAP operators, recently partnered some banks to ease the roll out of meters which commenced on May 1.
FirstBank, Wema Bank, Unity Bank, Keystone Bank, Zenith Bank, Sterling Bank, Polaris Bank and First Option Micro Finance Bank – entered into a deal to provide retail financing to electricity customers to ease their acquisition of prepaid meters.
The banks will provide finance to customers within the coverage area of Mojec’s partner-electricity distribution companies (DisCos) across the country. The banks, recently, signed memorandum of understanding (MoU) with Mojec in Lagos.Managing Director/Chief Executive Officer, Mojec International Limited, Ms. Chantelle Abdul, said at a summit of the partnering banks and DisCos in Lagos that the company was determined to bridge the metering gap in the sector by ensuring provision of top quality electricity meters to customers in Nigeria. Mojec would be partnering eight DisCos, including, Ikeja Electric, Eko DsCo, Abuja DisCo, Kano DisCo, Enugu DisCo, Jos DisCo, Ibadan DisCo and Kaduna DisCo, covering about 20 states of the federation.”
NERC pegs estimated billing by Discos
The Nigerian Electricity Regulatory Commission (NERC) recently hinted of plans to peg estimated billings by Discos to a certain amount.
The latest intervention to save consumers from illegal charges was disclosed by NERC’s General Manager in charge of Finance and Management Services, Mr. Abdulkadir Shettima, at the launch of Bank Consumer and Retail Financing for MAP Meter Acquisition in Lagos last month.
Shettima said the move to peg estimated bills was aimed at compelling Discos to meter every consumer within 10- days as contained in the MAP regulation.
‘‘The Discos cannot simply continue with the old order of estimated bills. What we have done to is to say for a 2-bed room flat, they cannot charge above N3,000. If the Disco now feels shortchanged that the amount is too small for the consumer, then it should meter the consumer and save itself from the argument of consumption disagreements.’’ He said.
Shettima, commended Mojec for its leadership quality in the metering subsector as demonstrated by its efforts towards the full scale implementation of the MAP scheme, which allows customers easy and direct access to meter assets.
On the cost of the meters to be installed by the MAP licensees, which is fixed at N36,991.50 for single phase meters and N67,055.85 for three-phase meters respectively, Shettima said the Commission didn’t just fix the prices from nowhere.
According to him, out of the 36 successful bids received, the NERC selected the six lowest prices, got the average and used that in pegging the meter cost.
“MAPs shall charge an upfront amount of N36,991.50 for single phase meters and N67,055.85 for three-phase meters respectively. These costs of meters are inclusive of supply, installation, maintenance and replacement of meters over its technical life.
The Commission shall monitor closely the rollout plan of distribution licensees and overall compliance with the regulation and various service agreements by the MAP and electricity distribution licensees.’’ The Regulation stipulated
In his remarks at the MoU signing Chief Executive Officer, Polaris Bank, Mr. Tokunbo Abiru, explained that the bank was pleased to partner with Mojec by providing financing support to customers on the meter acquisition scheme. “Our bank is glad to be facilitating the acquisition of these meters by granting loans to eligible customers under the programme,” he said.
Acting Chief Executive Officer, Keystone Bank, Abubakar Sule, explained: “Energy cost is by all standards the major cost line in most homes and businesses. The scheme is set to eradicate the unnecessary prevalence of estimated billing, which deprived the national economy of funds which otherwise could be deployed into other productive use. We are, therefore, excited to be part of this initiative to bring electricity to homes and businesses at the most prudent cost, putting households and business in control of their expenditure pattern.” The Managing Director Unity Bank Plc, Tomi Somefun, explained that the development reinforces the long-standing beneficial relationship and business commitment it had maintained with Mojec International Limited for well over two decades, adding: “The partnership will create beneficial impact on electricity customers, further drive financial inclusion through consumer banking, restore customer’s confidence, increase transparency and thereby replacing the opaque estimated billing system that had prevailed.”
The Divisional Head, Retail and Consumer Banking, Sterling Bank, Shina Atilola, represented by Ayodele Odulaja, Head of Power and Telecoms Team, stated: “We are excited to be a key driver of the pre-paid meter acquisition programme, which will eliminate the inefficiencies associated with estimated billing and inaccurate post-paid meter readings. Leveraging technology, Sterling Bank is reputed for providing Nigerians with a convenient way to access loans ranging from N10,000 to N5million in five minutes through the Specta online lending platform.
‘’Electricity consumers will benefit from the speed of this solution under this partnership without the attendant delays of traditional lending.”
The Managing Director, Wema Bank, Ademola Adebise, noted that the partnership with Mojec is a proof of the bank’s commitment to provide simple and easy retail financing for Nigerians. ‘’As a bank that takes pride in applying innovative solutions to societal challenges, we are proud and excited to work with Mojec in meeting the demands of equitable electricity metering in the country. This is a reflection of our can’t stop, won’t stop drive to create avenues that will support Nigerians to achieve their future dreams today,” he said.
The Managing Director, First Option Micro Finance Bank, Godfrey Ogbuehi, stated: “The MAP project resonates so much with the company’s goal of enhancing lives and in response, a new product, Light-Up Loan (Prepaid Meter Acquisition Loan), has been strategically created to provide funding to help energy consumers (both individual and businesses), especially the low- income earners and rural dwellers; acquire prepaid meters with ease under the Meter Asset Provider Regulations.” (Electricity Hub)