The Federal Government has allocated N120 billion as the first tranche for the Presidential Metering Initiative (PMI) to address the metering gap in Nigeria’s electricity sector. This funding comes from revenue made in April and distributed in May 2024, as detailed in the Federal Account Allocation Committee (FAAC) disbursement report by the National Bureau of Statistics (NBS).
Initial Funding and Support
The N120 billion allocation represents approximately 10% of the revenue shared among the three tiers of government in May 2024 and 9% of the N1.325 trillion expected to be spent on the PMI.
The government will provide an initial N75 billion as seed capital, with the Nigerian Sovereign Investment Authority (NSIA) pledging a minimum annual injection of N250 billion for the initiative’s duration.
The PMI aims to eliminate estimated billing by equipping all Nigerian homes and businesses with prepaid meters.
This initiative is expected to unlock about N1 trillion in revenue currently tied up due to a large number of unmetered customers in the Nigerian Electricity Supply Industry (NESI).
Funding and Financial Strategy
The PMI will leverage debt financing from various financial institutions to enhance its resources.
The Nigerian Electricity Regulatory Commission (NERC) has approved N21 billion for the 11 electricity Distribution Companies (DisCos) to provide meters for end-use customers at zero cost, as specified in ORDER NO: NERC/2024/072.
Current Challenges and Statistics
Despite efforts, the number of estimated billing customers has continued to grow both quarterly and annually.
Data from the NBS for the first quarter of 2024 shows a 10% increase in estimated billing customers from Q4 2023, rising from 5.83 million to 6.43 million.
Year-on-year, the number of estimated billing customers increased by 8% from 5.96 million in Q1 2023 to Q1 2024.
The government continues to subsidize customers not on Band A, while those on Band A with estimated billing must still pay based on estimation.
The persistent metering gap underscores the sector’s challenges, as various initiatives have struggled to adequately meter all customers.
Context and Implications
– The PMI is part of President Bola Tinubu’s broader agenda to improve the electricity sector, aligning with his campaign promise to eliminate estimated billing.
– Despite these efforts, the increasing number of estimated billing customers highlights ongoing challenges in achieving universal metering.
