The Central Bank of Nigeria (CBN) has introduced a framework for financing the National Mass Metering Programme (NMMP) recently implemented by the federal government.
The move by the apex bank was geared towards mitigating the metering gap of over 10 million customers in the Nigeria Electricity Supply Industry, t
According to the apex bank, the framework released yesterday outlines the operational modalities of the CBN financing support to the Distribution Companies, DisCos, (Downstream) and Local Meter Manufacturers (Upstream).
It stated: “The introduction of the service-based tariff (SBT) in the Nigeria Electricity Supply Industry (NESI) effective from 1st September 2020 has put increased emphasis on the need to close the metering gap in the NESI.
“The closing of this gap will enhance the clearance of revenue collection by Distribution Companies (DisCos) and thereby facilitate meeting their obligations to other upstream market participants.”
The objectives of the framework are to increase Nigeria’s metering rate; Elimination of arbitrary estimated billing; Strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity; Support Nigeria’s economic recovery by creating jobs in the local meter value chain; Reduction of collection losses and increasing financial flows to achieve 100 per cent market remittance obligations of the DisCos; Improve network monitoring capability and availability of data for market administration and investment decision making.
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The apex bank noted that the facility shall be administered at an “all-in” interest rate of not more than 9.0 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 five per cent per annum.
The CBN said: “Procurement of fully assembled meters from overseas is prohibited except meters imported by Meter Asset Providers (MAP) already in the country as at September 30, 2020,and verified by NERC; and importation of related metering infrastructure that is currently being produced in the country is also prohibited.”
On sanctions arising from infractions, the apex bank noted: “Diversion of funds by the Participating Financial Institutions, PFIs shall attract a penalty at the bank’s maximum lending rate at the time of infraction; Non-rendition of returns or the rendition of false returns shall attract penalty;
“In the event of default in loan repayment (principal and interest), the PFIs shall have the right to charge commercial interest rate on the amount of default; Unauthorized withdrawals from revenue collection account – the Deposit Money Bank (DMB) to refund the money within 48 hours of discovery; Banks that flout the Terms & Conditions of the facility would be sanctioned.”
