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NERC approves N21b for purchase of meters

Govt directs electricity companies to charge Nigerians per hour

The Nigerian Electricity Regulatory Commission (NERC) has announced the approval of N21 billion for 11 electricity Distribution Companies (DisCos) to provide meters for customers.

This announcement was made in NERC’s ORDER NO: NERC/2024/072 on The Operationalisation of “Tranche A” of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund.

”The order signed by NERC Chairman, Mr Sanusi Garba and Commissioner Legal,  Dafe Akpeneye, shall become effective from June 2024 and may be amended or revoked by subsequent orders issued by the commission.

“The commission hereby approves the  sum of N21 billion apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme.

”Attached to this order as Schedule 1 is a breakdown of the funds available for each DisCo for the purchase of end-use customer meters.

”All the meters to be procured and installed under the MAF framework shall be at no cost to the customers of the DisCos,” it said.

According to NERC, it introduced the Meter Asset Provider (“MAP”) Regulations 2018 and subsequently, the Meter Asset Provider and National Mass Metering (“MAP&NMMR”) Regulations in 2021 to address metering challenges in the Nigerian Electricity Supply Industry (“NESI“).

NERC said that the regulations provided several options for metering end-use customers but the interventions, though significant, had not resulted in the closure of the national metering gap which currently stood in excess of seven million customers.

”The inability of distribution companies (DisCos) to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.

”The Meter Acquisition Fund (MAF) scheme was therefore, developed and approved by the commission, primarily to address the challenges of DisCos creditworthiness inhibiting the deployment of end-use meter in NESI.

”By creating a credible revenue stream from the market funds on the back of which long term financing may be secured by the utilities,” it said.

NERC said that the management of Fund Manager (FM) based on terms and conditions, negotiated by the DisCos and approved by the commission.

According to the commission, the federal government approved the Presidential Metering Initiative (PMI) with the overarching objective of closing the metering gap in the NESI within three years leveraging on smart metering technologies for data analytics.

The MAF shall form one of the revenue streams for the repayment of the long tenor financing for metering.

The order also revealed that the commission approved the deregulation of meter prices under the MAP scheme vide Order NERC/2024/040 to ensure an efficient pricing of meters while responding more quickly to changes in macroeconomic parameters.

“The order provides that all prices of meters under the MAP scheme shall be determined through a transparent and competitive bidding process by eligible MAPs.

“A competitive bidding process was held on  May 21, 2024 based on the provisions of Order NERC/2024/040 where a total of 24 ( MAPs participated across the 12 DisCos.

”A total of 44 bids were submitted for 10meters specifications,” it said.

NERC said the deployment of funds under the MAF scheme would accelerate the deployment of meters and a closure of the current metering gap.

”Thereby reducing commercial and collection losses to DisCos, enhancing quality of service and improvement of customer satisfaction,” it said.

NERC also noted that while the NESI is expected to leverage on the revenue stream under the MAF framework to raise substantial capital funding for metering, there was an imperative to accelerate a closure of the metering gap for all customers.

”Currently classified under tariff Band A for the purpose of revenue protection and facilitating demand side management for the affected customers.”

NERC said that the DisCos should utilise the first tranche (Tranche A) of disbursement from the MAF scheme based on contributions made by DisCos as at the April 2024 markets settlement.

It said that attached to this order as Schedule 1 was to procure and install meters for unmetered Band ‘A’ customers within their franchise areas.

The commission said DisCos shall, within 14  days from the effective date of the order, conduct a transparent and competitive procurement process, for meter price determination, selection and engagement of MAPs/LMMAs for the metering of end-use customer meters under the MAF scheme.

”The order also directed that a report containing details of the process undertaken for the selection of MAPs/LMMAs including meter price, meter specifications.

”And the list of customers to be metered shall be sent to the commission for approval, within 20 days from the effective date of this Order.

” Upon approval of the commission, the DisCo shall enter into contracts with selected MAPs/LMMAs on one of the following terms,”it said.

The commission said that where an Advance Payment Guarantee (APG) issued by a commercial bank in the country is provided by a qualifying MAP/LMMA, 30 per cent of the contract sum shall be paid by the FM on behalf of the DisCo to the MAP/LMMA.

” Upon execution of the contract. A further two milestone payments shall be made upon the completion of 60 per cent of contracted quantities and 100 per cent of the contract respectively, with the funds advanced against bank guarantee amortized over the payments.

“Where the MAP/LMMA do not request an advance payment, the milestone payments shall be made upon the verified installation of 20, 60 and 100 per cent respectively of the contracted volume of meters.

”A vendor may, at his option, defer payment until the completion of the installation of the contracted volumes.

“DisCos shall ensure that all the necessary resources and network clearance required by the MAP/LMMA to install meters based on installation plans are provided and/or completed,” it said.

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CBN gives fresh guidelines on dormant accounts, unclaimed balances in banks

The Central Bank of Nigeria, CBN, has directed all banks and other financial institutions in the country to transfer all dormant accounts and unclaimed balances and other financial assets to its dedicated account.

The apex bank disclosed this on Friday in a guideline on the management of dormant accounts, unclaimed balances signed by its acting director of the Financial Policy and Banking Regulation Department, John Onojah.

According to the circular, all dormant accounts and unclaimed balances with banks for at least ten years will be warehoused in a dedicated account known as the Unclaimed Balances Trust Fund (UBTF) Pool Account”.

Accordingly, CBN said the funds from Dormant Accounts, unclaimed balances may be invested in Nigerian Treasury Bills (NTBs) and other government securities.

However, the new Guideline which is a review of the Guideline issued in October 2015 exempted dormant accounts, and unclaimed balances under litigation and investigation.

“CBN shall treat unclaimed balances (dormant accounts and financial assets) as follows:

“Open and maintain the ‘UBTF Pool Account’; Maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account;

“Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee’;

“Refund the principal and interest (if any) on the invested funds to the beneficiaries not later than ten (10) working days from the date of receipt of the request and where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI stating reasons for the extension,” it said.

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CBN’s decisive actions has strengthen the economy- Cardoso

The Central Bank of Nigeria (CBN) said in Abuja on Friday that its monetary policies and actions have stimulated growth and stability of the nation’s economy.

 

CBN Governor, Mr. Olayemi Cardoso, said this during an engagement with Senate Committee on Banking, Insurance and other Financial Institutions.

Cardoso said that given the positive indicators, Nigerian were in for better days.

He said: “The spread between official and BDC rates has narrowed significantly from N162.62 in January to N47.22 in June indicating successful price discovery, increased market efficiency and reduced arbitrage opportunities.

“The stock of external reserves increased to 36.89 billion dollars as of July 16, compared with 33.22 billion dollars as at end-Dec 2023, driven largely by receipts from crude oil related taxes and third-party receipts.

“In first quarter 2024, we maintained a current account surplus and saw improvements in our trade balance.

According to him, the nation’s external reserves level as at end of June can finance over 11 months of importation of goods and services or 14 months of goods only.

Cardoso said this was significantly higher than the prescribed international benchmark of 3.0 months, indicating a strong buffer against external shocks.

He said that the banking sector remained robust and diverse, comprising 26 commercial banks, six merchant banks and four non-interest banks.

“Key indicators such as capital adequacy, liquidity, and non-performing loan ratios all showed impressive improvements, underscoring the sector’s growing stability and resilience.

“The equity market has shown impressive performance, with the All-Share Index rising by 33.81 per cent and market capitalisation expanding by 38.33 per cent from Dec 2023 to June 2024, reflecting growing investors’ confidence,” he said.

Cardoso said that while CBN was encouraged by these positive trends, it remained vigilant and committed to implementing policies that support sustainable growth in the financial markets, while maintaining overall economic stability.

He also assured  members of the committee that required measures and strategies had been mapped out to confront emerging challenges.

“To combat inflation, we have implemented a comprehensive set of monetary policy measures.

“These include raising the policy rate by 750 basis points to 26.25 per cent, increasing cash reserve ratios, normalising open market operations as our primary liquidity management tool.

“And adopting Inflation Targeting as our new monetary policy framework,” he said.

Cardoso said in the area of banking supervision, CBN had taken decisive actions to ensure the safety, soundness, and resilience of the banking industry.

He said that key measures included intervention in three banks, revocation of Heritage Bank’s license, increasing minimum capital requirements, and enhancing AML/CFT supervision.

“We also introduced new frameworks for Cash Reserve Requirements and cybersecurity and prohibited the use of foreign currency collaterals for local currency loans,” he said.

Cardoso said that CBN was in the process of reviewing micro and macro prudential guidelines to reinforce the resilience of financial institutions to withstand tightened conditions, thereeby creating a secure and attractive investment climate.

“We have signaled our plans to re-capitalise deposit money banks in Nigeria to improve capital inadequacy and their capacity to grow the economy.

“Our ultimate goal is to create a more stable, resilient, and efficient financial system that can better serve the Nigerian economy, while adhering to international best practices,” he said.

Earlier, Chairman of the Committee, Sen. Adetokunbo Abiru, said the purpose of the interaction was to update the committee on efforts, activities, objectives and plans of the CBN with respect to monetary policy.

 

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Nigeria’s external reserves surge to $35.77bn – CBN

Nigeria’s external reserves increased to $35.77 billion on Thursday up from the $33.09 Billion at the end of 2023.

This is according to Thursday’s data from the Central Bank of Nigeria on the country’s external reserves movement.

The figure represents a $2.68 billion increase in the country’s external reserves in the past six months.

Further data showed that Nigeria’s foreign reserve crossed the $35.05bn on July 8 to the $35.77 mark on Thursday.

Meanwhile, according to the recently released economic outlook by CBN, titled ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’, the apex bank had projected a decline in the country’s external reserves in 2024.

The CBN based its assumption on continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service.

The apex bank, however, said, “the expected improvement in crude oil earnings, together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves.”

The outlook also projected a marginal increase to $19.42 billion from $19.17 billion in 2023 for diaspora remittances.

“The external reserves, which stood at $33.09bn in 2023 could reduce slightly in 2024.

“This is on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service,” it said.

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