FG To Allocate N75b Seed Capital For PMI
The Minister of Power, Adebayo Adelabu, has emphasised that the capacity of local manufacturers is not enough to provide the number of electricity metres required to bridge the over seven million metering gap in the country, noting that a combination of importation and local production is essential.
Adelabu made this known during his official visit to Femadec Group, where he highlighted the critical importance of addressing the metering gap to improve electricity distribution in Nigeria.
Nigeria faces a significant shortfall in electricity metres, with over seven million households and businesses lacking access to prepaid metres. This has resulted in challenges such as estimated billing, revenue losses and consumer dissatisfaction.
The minister stated that after visiting several metre manufacturing plants, he observed that they had limited capacity. This, he explained, was not their fault but rather due to lack of sufficient patronage for them to expand. However, he expressed confidence that once they are patronised, their capacity would expand.
“And after closing the gap, I believe the local manufacturers will basically service the remnants of gaps that we left going forward because as they are closing this gap, there will still be new connections that will need to be made, and a lot of these metres after 10 years get obsolete and they need to be replaced. So, there is a huge market for local manufacturers,” he said.
Adelabu further emphasised the need to complement local capacity, stating that this is what the sector requires. He explained that to address the metering gap effectively, the sector must leverage both international and domestic markets, stressing that importation could help meet immediate demand while local production strengthens the capacity to meet long-term needs.
He also announced that as part of efforts to bridge the metering gap, the Federal Government would allocate N75 billion as seed capital for the Presidential Metering Initiative (PMI), along with debt funding. He mentioned that the initiative would be funded by a mix of equity capital and debt funding.
“The government will provide a seed capital of about N75 billion and there will be debt funding from various financial institutions into the PMI. Additionally, the Nigeria Sovereign Investment Authority (NSIA) will provide at least N250 billion annually to enable the sector to fund the metre acquisition plan.
“And the target that we have is that within four to five years, we should close the gap, which means that a minimum of two million metres must be installed annually under the PMI, for which it has also established a Presidential Metering Council (PMC) of which I’m the Chairman with other major stakeholders represented, including the Senior Advisor to the President on Energy and some private sector players,” he said.
The Chief Executive Officer of Femadec Group, Fola Akinnola, disclosed that the portals for acquisition of metres were closed because they were working on regularising the pricing. He noted that the old pricing model was no longer sustainable but gave the assurance that the portals would soon reopen and bidding for metres would commence.
“The current issue has to do with foreign exchange but I think before the end of the month or earlier, the portals will be open for all the Distribution Companies (DisCos) and we will start having opportunities to buy metres,” he said.