A Nigerian firm, Meter Assets Finance and Management Company (MAPCo), has concluded plans to raise N480 billion ($1.2 billion) over the next 3 years, to purchase electricity meters and help the electricity distribution companies (DISCOs) plug revenue gaps in their operations.
This is also in line with the Federal Government’s initiative to ensure that all electricity consumers are metered, which will put an end to estimated billing by the DISCOs.
According to a report from PricewaterhouseCoopers, less than one-tenth of Nigeria’s 41 million households have their electricity consumption metered, and half of those are faulty. As a result, distribution companies have to estimate bills, resulting in constant conflict with the consumers that delay payments.
The Chief Executive Officer of New Hampshire Capital, Onion Omonforma, said the Meter Assets Finance and Management Co. hopes to end the practice of estimated billings by raising funds to purchase and supply meters to consumers.
New Hampshire Capital, FBNQuest and Kairos Investments Africa are helping to package and structure the venture, known as MAPCo, for investors to either buy equity or inject debt into the company.
What they are saying
Omonformaa said, “The electricity distribution firms will then have the money to go back and buy more meters and the cycle continues, paving the way to close the metering gap. MAPCo will collect the cost of the meters from consumers at a premium over the next 10 years. The meters will be handed over to the power-distribution companies once paid off.’’
While disclosing that MAPCo plans to issue a N100 billion bond in the next year, Omonforma also pointed out that roadshows have been planned for the U.S. and Europe, and will include local institutional investors.
He said, “We envisage that a lot of people who are looking for a long-term instrument will key into it,”
It can be recalled that apart from repealing the estimated billing methodology in determining tariffs for electricity consumers; the Federal Government had insisted that all consumers must be metered, as part of the condition for a tariff increase.
Also, as part of the agreement reached with the organized labor in respect of the tariff increase; the Federal Government disclosed that the National Mass Metering Programme will be accelerated, with the distribution of 6 million meters to Nigerians for free.
What this means
A huge number of electricity consumers across the 36 states and the FCT are still unmetered by their respective DISCOs. This initiative by MAPCo will help bridge the existing gap, with more electricity consumers acquiring a prepaid meter and doing away with the controversial estimated billing.