Bureau of Public Enterprises Explains How Nigerians Will Ultimately Pay for Prepaid Meters Through Tariffs
The Bureau of Public Enterprises (BPE) has provided clarification on the contentious issue of prepaid meter installation in Nigeria, stating that electricity consumers will eventually cover the costs through tariffs, despite the Federal Government's insistence that meters are being deployed free of charge. This explanation comes amid a public disagreement between government authorities and electricity distribution companies (DisCos) over responsibility for funding the meter rollout under World Bank-supported programs.
Indirect Cost Recovery Through Tariff Framework
According to the BPE, while customers are not required to make any direct or upfront payments for meter installation, the infrastructure costs are factored into electricity tariffs over time. Ayo Gbeleyi, Director-General of the BPE, emphasized during a recent event in Lagos that all capital investments made by DisCos—including meters, transformers, and feeders—are recovered through the tariff framework approved by regulatory bodies.
"Electricity users eventually pay for these assets indirectly via their electricity bills," Gbeleyi stated, addressing claims that DisCos were being forced to repay meter costs over a 10-year period, which he described as misleading.
World Bank Financing and Government Intervention
The federal government's intervention in the metering program is supported by a highly concessional World Bank loan, with DisCos expected to repay the facility over 20 years. This arrangement includes:
- A five-year moratorium on principal repayment
- A two-year interest moratorium
- Approximately 3.22 million meters to be supplied to DisCos under the Distribution Sector Recovery Programme
Gbeleyi stressed that consumers are not expected to pay installers or DisCos directly for the meters, with over 600,000 meters already arrived in Nigeria from an initial batch of about 1.44 million units, and roughly 75,000 installed so far at no immediate cost to consumers.
DisCos Challenge Government Position
Electricity distribution companies have disputed the government's position, citing concerns over cost recovery and installation expenses. DisCos argue that the directive from Minister of Power Adebayo Adelabu—who ordered that meters procured under the World Bank-funded program must be installed free of charge—fails to clarify who will pay for procurement and installation if meters are given out without charge.
Power distribution operators note that installers are not DisCo staff and must be compensated by someone, adding that the directive is already affecting the Meter Asset Providers scheme. Adelabu has warned that any DisCo official or installer found collecting money from consumers would face prosecution, creating tension between regulatory enforcement and practical implementation challenges.
Addressing Nigeria's Metering Gap
The initiative targets Nigeria's significant metering gap, currently estimated at approximately 5.9 million unmetered customers. The World Bank-supported program will be complemented by the Presidential Metering Initiative, which is expected to deliver an additional 2.61 million meters to further reduce the deficit.
This clarification from the BPE follows increasing public confusion about meter financing, highlighting the complex interplay between government policy, international funding, utility company operations, and consumer electricity costs in Nigeria's evolving power sector landscape.
