The Bureau of Public Enterprises, an agency of the Federal Government, has said that electricity consumers will pay for the ongoing free meter installation through their tariffs.
The disclosure comes amid a row with electricity distribution companies over who is responsible for covering the cost of the prepaid meters being rolled out under World Bank–funded programmes.
The Federal Government and electricity distribution companies have been at loggerheads over who bears the cost of prepaid meters being rolled out by the Federal Government.
The disagreement erupted after the Minister of Power, Adebayo Adelabu, directed that prepaid meters procured under the World Bank–funded Distribution Sector Recovery Programme must be installed for electricity consumers free of charge, warning that any official or installer found collecting money would be prosecuted.
However, electricity distribution companies expressed doubt over the directive, insisting that although customers may not pay cash upfront, the meters would still be paid for by the DisCos over a period of 10 years, raising concerns about cost recovery, installation expenses, and the financial implications for operators.
Reacting to the controversy, the Director-General of the Bureau of Public Enterprises, Ayo Gbeleyi, dismissed claims that the DisCos were being asked to pay for the meters over a 10-year period, regretting that the Federal Government’s free metering programme was receiving pushback from the DisCos.
Speaking in Lagos at the ₦501 billion bond issuance signing ceremony to settle power sector debt, Gbeleyi expressed concern that the DisCos were giving a wrong narrative as far as the free metering initiative was concerned.
Addressing claims by DisCos that they were expected to repay the cost of the meters over a decade, the BPE boss said such assertions were inaccurate and misleading. He noted that meter costs are embedded in tariffs over time, just like transformers, feeders, and other investments of the DisCos.
“We’ve had pushback where some have said, ‘No, the DisCos are paying for the meters over 10 years.’ The truth is, every component of investment that goes into the DisCos gets recouped through the tariff structure. So, whether it is a feeder pillar, whether it is a transformer, or whether it is a meter, we as consumers will ultimately pay for those pieces of equipment through the tariff design,” he said.
Gbeleyi’s clarification shows that meters are not given to customers at no cost, as they would pay for them through their tariffs. He added that the DisCos often failed to mention the concessional nature of the Federal Government’s intervention, which he said was to be repaid over 20 years.
“However, what they are not telling you is that the Federal Government’s major intervention is indeed one of the best loan transactions today extended to the power sector. It is a 20-year loan facility. It comes with a five-year principal moratorium and a two-year interest moratorium to the DisCos. We have never seen any capital lending to that sector of that magnitude in the history of the power sector in Nigeria,” Gbeleyi said.
He insisted that suggestions that DisCos were paying for the meters were unfounded. “So, for anyone to then suggest that they are paying over 10 years, or that the DisCos are paying for it, that’s absolutely not the case. So we are taking this opportunity to provide that clarity to Nigerians,” he added.
According to him, the Federal Government had embarked on the Distribution Sector Recovery Programme, which is a $500 million loan intervention from the World Bank to assist distribution companies to strengthen their infrastructure and improve governance, as well as enhance liquidity.
“In this regard, a total of about 3.22 million meters are being made available to the DisCos,” Gbeleyi said.
Clarifying the status of the metering initiative, he said that the meters were being given to consumers free of charge.
“At this juncture, permit me to also elaborate and clarify that, last week, together with the Minister of Power, we were at the Apapa Port to inspect the recent batch of meters that are coming to the country. In total, out of the initial contract of about 1,437,500 units of meters, we have received over 600,000 meters. And we have also installed close to 75,000 meters, free of charge indeed, to consumers.”
Gbeleyi stressed that electricity consumers were not required to pay for the meters, noting that the intervention was targeted at addressing Nigeria’s wide metering gap.
The PUNCH
