The Central Bank of Nigeria (CBN) released a template for accessing its facility under the Nationwide Mass Metering Programme (NMMP).
The funding program, targeted at Local manufacturing and assembling of prepaid meters has the following objectives
- 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% market remittance obligations of the DisCos; and
- Improve network monitoring capability and availability of data for market administration and investment decision making.
The template titled: ‘Framework for Financing of National Mass Metering Programme’ provides detailed guides and conditions for accessing the facilities for electricity Distribution Companies (DisCos) and local meter manufacturers.
Here is a brief description of the content of the CBN template for the financing of the National Mass Metering Program.
Eligibility Activities – Procurement and deployment of meters and the
associated infrastructure (software and hardware) to support the metering network.
Prohibited Activities – Procurement of fully assembled meters from overseas, except already in the country as of September 30, 2020, and importation of related metering infrastructure that is currently being produced in the country.
Loan tenor – Maximum tenor of 10 years, not exceeding 2030
Moratorium – Only on the principal amount for a period not exceeding 24 months from the date of loan disbursement.
Interest Rate – All-in Interest Rate of not more than 9% per annum. However, 5% to be charged up to 28th February 2021 as part of the Covid-19 relief package.
Collateralization – NERC’s approval of a DisCos loan request as a regulated debt obligation to be charged against all energy collections for the Nigeria Electricity Supply Industry (NESI) as the next line charge in the
payment waterfalls of each DisCo below the existing payment to the Nigeria Electricity Market
Stabilization Facility (NEMSF), will serve as collateral for the lending.
Loanable Amount – To be determined based on the volume and type of meters to be procured by each DisCo as well as the prices at which meters are bought during the bulk procurement
According to the template, “Eligible manufacturers must demonstrate a track record of experience in manufacturing key meter components up to the quality standards instituted by the NERC and/or Nigerian Electricity Management Services Agency (NEMSA) and/or Standards Organisation of Nigeria (SON).”