Power Minister Adelabu has unveiled a plan to secure N300bn funding to bridge Nigeria’s seven million metering gap.
Nigeria’s federal government has charged all the 11 electricity distribution companies (Discos) in the country to be ready to receive and distribute not less than 6,100 megawatts (MW) of electricity in the next six months.
Minister of Power, Adebayo Adelabu, who stated this, also announced the government’s plan to secure funding ranging from N250 billion to N300 billion to close the over seven million metering gap in the country on an annual basis over the next four to five years.
He explained that the government intended to raise that fund through a N75-billion seed capital to be provided by President Bola Tinubu’s administration, along with additional debt capital injections from the Nigeria Sovereign Investment Authority (NSIA).
Adelabu revealed these at the weekend when he visited Eko Electricity Distribution Company (EKEDC) in Lagos and the Momas Electricity Meters Manufacturing Company Limited (MEMMCOL) in Ogun State.
He revealed that a bill for legislation to replicate local content law in the power sector was underway.
Speaking at the Eko Disco office, Adelabu said the charge to the Discos to be prepared to uptake 6,100MW became necessary after the Transmission Company of Nigeria (TCN) successfully conducted system stress tests, where it demonstrated its ability to transmit over 8,100MW, alongside the proposed plans for a partial Sovereign Risk Guarantee (SRG) to enhance generation companies’ (Gencos) capacity.
With Eko and Ikeja Discos having exceeded a specified threshold through improved collection efficiency and service quality, Adelabu said he had unveiled a strategic plan to utilise the two Discos as model Discos to pilot test the anticipated effective supply to be implemented sector-wide in the next few months.
He said the two Discos would serve as a standard for emulation by others.
However, at the MEMMCOL meter plant in Ogun, Adelabu also stated that in line with President Tinubu’s Renewed Hope Agenda, the government was targeting to provide about 2.5 million prepaid meters every year to close the nation’s metering gap.
This, he said, would help the government in the promotion of import substitution policy of locally-made products in the power sector and encourage backward integration in the areas of technical training.
He equally expressed the current administration’s commitment to support local original equipment manufacturers (OEMs) by working on a bill that would promote local content for the power sector.
“We have a Presidential Metering Initiative that has the target of installing a minimum of two million to 2.5 million meters every year for the next five years, for us to close the huge metering gap that we currently have in the power sector.
“Even if we cannot close it 100 per cent as there will be new connections, we have to reduce it significantly and the government cannot do it alone. We have to do it jointly with all parties because we all contributed to the decay in the sector and we must also contribute to reversing the decay”, the minister stated.
He maintained that the initiatives would encourage investors to risk their equity and debt capital to establish local industries.
“In the power sector, it is our choice to have significant local content in our projects and our contracts. We are trying to work on a bill now that will legislate local content for the power sector just like we have in our oil and gas. That is the only way we can sustain local producers. So, that is the reason I am here.”
In his earlier briefings to the minister, the Chairman of MEMMCOL, Mr. Kola Balogun, thanked Adelabu for the courage and commitment he had shown so far to reverse the ugly trends in the power sector.
Balogun, however, noted that the demand for prepaid meters in Nigeria surpasses the volume of other countries in Africa, noting that local patronage was still needed for them to meet the investment threshold.
