The Federal Government launched the National Mass Metering Programme (NMMP) in respect of which the CBN, on October 2020 issued the Framework for Financing of National Mass Metering Programme (“CBN Framework”). The Framework seeks to, amongst others, increase the country’s metering rate and eliminate arbitrary estimated billing.
By the said Framework, the CBN will be providing financing support to the DisCos (for the procurement of meters for customers) and the local meter manufacturers. In light of introduction of this Framework, below is a compilation of probable questions customers and MAPs may have and answers to them.
A Meter Manufacturer Asks
i. What does NMMP mean?
It means National Mass Metering Programme. It is a metering initiative introduced by the Federal Government of Nigeria geared towards mass metering of Nigerians by providing loan facility to (i) the DisCos (for the procurement of meters for its customers); and (ii) the local meter Manufacturers (for the manufacturing and assembling of meters).
ii. What activities qualify for the CBN facilities?
For the facility granted to the DisCo, such facility can only be used by the Disco to procure meters locally manufactured in Nigeria. However, meters verified by the NERC to have been imported by a Meter Asset Provider (MAP) as at September 30, 2020 may also be procured by the DisCo using the facility. The DisCo can neither use the facility to procure fully assembled meters imported by a MAP nor can it use the facility to import metering infrastructure that are currently produced in Nigeria.
With respect to the facility granted to local meter manufacturer, such local manufacturer cannot use the CBN facility to finance the importation of fully assembled meters. The implication of this is that the local manufacturer can use the facility to import Completely/ Semi-Knocked Down (CKDs/SKDs) Components for assembling in Nigeria.
iii. What are the details of the facility granted to local Meter Manufacturers?
The facility granted is at most 70% of the total cost of the applicable costs related to meter manufacturing.
The facility has the maximum tenor of 10years but does not exceed December 31, 2030. The tenor for working capital facility, however, is 1 year with the opportunity to roll-over not more than twice (that is; maximum of 3 years altogether). The interest rate is not more than 9% per annum; or as may be specified by the CBN. The Framework provides for moratorium of 2 years.
iv. What can the facility granted to local meter manufacturers be used for?
A local meter manufacturer who is interested in the facility can only use the facility to procure manufacturing or assembly equipment for meters; set up or expand assembly/manufacturing facilities; procure production data management and software systems; and working capital. However, the facility cannot be used to finance the importation of fully assembled meters.
v. Our organization is interested in the facility granted to local meter manufacturer. Are we considered local meter manufacturer?
To be considered a local meter manufacturer, your company must either be engaged in manufacturing electricity meters and its components; or in the assembly of the CKDs/SKDs.
To qualify for the grant, interest applicants must demonstrate both technical and financial capacities. The purpose of the financial capacity to determine whether the applicant company can repay the loan. In addition, the applicant company must show evidence of it is locally owned or it is a consortium involving a minimum of 70% local ownership. Finally, the applicant must demonstrate, through a detailed training plan, its commitment to employ local talents.
vi. What are the documents required for the application?
- Written request from the project promoter;
- Certified True Copy of Certificate of Incorporation;
- Certified True Copy of MEMART;
- Certified True Copy of Form CAC 1.1;
- Business plan containing the organizational chart, health and safety guidelines, 3-year financial projections, and detailed vocational and technical training plan; and
- Latest three (3) years audited financial statements for existing companies or a 6-months Management Account for new companies.
vii. How do we apply for the facility?
Request from eligible company is sent to Participating Financial Institutions (PFI) under the RSSF/DCRR. The PFI is required to conduct due diligence and obtain internal approval for the facility. Thereafter, the PFI submits the request to the CBN for approval and release of funds.
B. Customer Asks
i. Am I required to pay for meters received under the NMMP?
Although the DisCo is expected to repay the facility provided by the CBN, nothing in the Frameworks shows that you, as a customer, are to pay for the meters. This means that Customers are entitled to meters free of charge. However, depending on the contract between the meter supplier and your DisCo, you may be required to make some payments, if, for example, you willfully damage your meter.
ii. Who do I meet to get my meter: my DisCo or the MAP?
It is advisable that you meet with your DisCo for installation of meter in your premises. This is because the DisCo have been mandated to provide meters.
iii. I am owing electricity bills. Am I entitled to Meter?
Yes, you are entitled to meter. However, you will have to enter into some payment plan with your DisCo to settle your outstanding bill.
iv. Who owns the Meters installed?
The DisCo owns the meter.
v. I am yet to receive my meter. How am I billed?
Until you are given a meter, you are billed according to 2020 Amended Order on the Capping of Estimate Bills (Order). This Order protects you from being arbitrarily billed by ensuring that you are not billed for electricity that you consume beyond the cap stipulated for your band in the Order.
To ensure transparency, your Disco is expected to indicate on your bill and receipt the business unit, transformer name, tariff class and rates. To know the cap associated to your band area, you may refer to the NERC order issued for your disco at https://nerc.gov.ng/index.php/library/documents/NERC-Orders/Amended-Orders-on-the-Capping-of-Estimated-Bills/
v. I don’t want a meter. Can I reject being metered?
You may reject meter installation in your premises. However, you will be disconnected from your DisCo. Kindly also note that energy theft is a crime.
A Meter Asset Providers (MAPs) Ask
i. What happens to the meters ordered under the MAP?
The Framework envisages two phases: phase 0 and Phase 1. Phase 0 covers meters ordered under the MAP programme. To this end, the Commission is expected to send to the CBN the verified stock allocated to the DisCo, invoice for the meters to be bought, agreement with the MAPs, and evidence of local procurement, amongst others.
Phase 1 however deals with the bulk procurement from local meter manufacturers/assemblers.
ii. Are all MAPs eligible to take part in the supply of meters to DisCos under the NMMP?
Yes, all MAPs included in the NERC’s Approved Meter List can take part in phase 0. However, it is doubtful that all MAPs can take part in Phase 1. This is because Phase 1 envisages bulk procurement from local manufacturer/assemblers; and not all MAPs are manufacturers or assemblers.
iii. Am I bound by the Metering Services Agreement (MSA)?
Your obligations under the MSA continues to apply in so far as the MSA exists. However, it is advisable to terminate the MSA and enter into another agreement with the DisCo to replace the MSA. This is the CBN NMMP Framework deviates to some extent from some of the terms provided under the MSA. For instance, rather than the customers paying, the Framework provides for payment by the DisCo as financed by the CBN. To therefore protect you from having two parallel contracts in respect of the same transaction, it is tidier and less risky to have another agreement replace the MSA. However, entering into another agreement does not obliterate rights and obligations existing as at the date of terminating the MSA.
iv. Does the MAP Regulation still apply in light of the CBN NMMP Program?
The CBN Framework fails to show the relationship between it and the MAP Regulation: whether it complements it or replaces it. However, unless it is repealed, the MAP Regulations 2018 is still in force.