- Nigerian Senate approves $500M loan for electricity meters, aiming to enhance service delivery and revenue collection in the electricity sector, aligning with the DISREP program.
- Loan part of broader $7.94 billion borrowing plan initiated by President Tinubu, emphasizes transparency and compliance with fiscal responsibility laws to safeguard Nigeria’s economic growth and sovereignty.
- Recent NERC deregulation enables end-users to procure meters from MAPs, fostering a competitive market environment, while the loan focuses on tackling financial and technical challenges in metering infrastructure to improve DisCos’ performance.
The Nigerian Senate has granted approval for President Bola Tinubu’s loan request of $500 million to provide electricity metres for Nigerians.
The loan program is designed to tackle the financial and technical hurdles confronting electricity distribution companies in Nigeria. Its primary focus is on enhancing metering infrastructure. The objective of this initiative is to bolster revenue collection efficiency and elevate service delivery standards in the electricity sector.
This loan, a Nigeria Distribution Sector Recovery Program (DISREP) component, aims to bolster Electricity Distribution Companies’ (DisCos) financial and technical performance.
The approval came on Wednesday, May 15, 2024, during the Senate’s consideration of the report submitted by the Senator Aliyu Wammako-led Senate Committee on Local and Foreign Debts. During the presentation of the report to the Senate, the Vice Chairman of the Committee, Senator Haruna Manu, affirmed that the approval aligns with the ongoing negotiation of external borrowing for the Bureau of Public Enterprise (BPE).
Senator Manu emphasized that the loan’s terms and conditions would safeguard Nigeria’s economic growth and sovereignty. He elucidated the legislative process and legal framework guiding external borrowing, underscoring the imperatives of transparency, compliance with fiscal responsibility laws, and accountability in debt management.
This loan forms part of a larger $7.94 billion external borrowing plan initiated by President Tinubu and initially submitted on November 1, 2023. The Senate had previously greenlit borrowing of $7.4 billion during a special plenary session on December 30, 2023, following a thorough review of the Committee on Local and Foreign Debt’s report.
Note that recently, the Nigerian Electricity Regulatory Commission (NERC) has taken a significant step towards deregulating meter access in Nigeria. This move enables end-use customers to procure meters from Meter Asset Providers (MAPs) based on competitive open market prices determined through transparent bidding frameworks.