The Central Bank of Nigeria (CBN) has moved to freeze 157 accounts of companies that are Meter Asset Providers (MAPs) for allegedly diverting funds meant for the procurement of prepaid meters.
The apex bank in a suit filed at the Federal High Court in Lokoja, Kogi State, on July 20, requested commercial banks to restrict the account of 10 companies that received power sector intervention funds under the National Mass Metering Programme (NMMP) for 180 days pending the outcome of its investigation.
The story was first reported by TheCable.
The National Mass Metering Program (NMNP) is an initiative of the Nigerian Electricity Regulatory Commission in conjunction with the Presidential Power Task Force.
The initiative which was launched in August 2020, was created to allow the CBN to fund the acquisition of meters on behalf of DisCos by paying directly to the MAPs.
The NMMP is geared toward mass metering of Nigerians by providing loan facilities to the electricity distribution companies (DisCos) for the procurement of meters for its customers; and the local meter Manufacturers, for the manufacturing and assembling of meters.
According to TheCable, the companies listed by the CBN as being involved in the diversion include Mojec Meter Asset Management Company Limited, Integrated Power Nigeria Limited, Holley Metering Limited, Protogy Global Services Limited, and Turbo Energy Limited.
Others are G Unit Engineering Limited, Koby Global Engineering Services Limited, FLT Energy Systems Limited, Smart Meters Asset Provider Company Limited, and Cresthill Engineering Limited.
The CBN in the suit said, “The Central Bank of Nigeria reviewed the activities of twelve (12) including the defendants herein Meter Asset Providers (MAPs) alleged to have diverted the Central Bank of Nigeria’s power sector intervention funds under the National Mass Metering Programme (NMMP).
“The review was aimed at ascertaining the flow of the funds made available to the MAPs, covering the period between January 1, 2020, to March 15, 2022. The preliminary review revealed that the defendants diverted a substantial portion of the funds for other uses through related entities and individuals/companies connected to the electricity distribution companies (DisCos) and the defunct Power Holding Company of Nigeria (PHCN).
“The diversion of the power sector intervention funds under the National Mass Metering Programme (NMMP) provided by the applicant’s banks, has further occasioned grave instability in the power sector and sustained the estimated billing regime which the federal government is making frantic efforts to make a thing of the past.
“The diversion of the said funds through the bank accounts of the defendants has continually undermined the applicant’s bank intervention system of supporting various sectors of the Nigerian economy.
“The diversion of the said funds and sustained instability in the power sector is capable of causing significant economic and financial loss to investors, as well as the entire systems and the Nigerian economy in general, if not curtailed.”
According to NERC, it created the initiative in response to President Buhari’s order that Nigerians must be metered. “The President has directed that there should be a nationwide mass-metering program in an effort by the Federal Government to put a stop to estimated and arbitrary billing for electricity.”
The Central Bank subsequently issued its framework for financing NMMP in October of 2020.
Nigeria’s central bank is heavily invested in the power sector through its intervention support programmes. According to the bank it has disbursed over N254.4 billion through its Nigeria Electricity Market Stabilization Facility – Phase 2 (NEMSF-2).
At the last Monetary Policy Committee meeting of the Central Bank, Governor Godwin Emefiele revealed it disbursed about N47.8 billion for about 865,956 meters across the country.
“To improve electricity supply in order to lower the overall cost of production in the real sector, the Bank also intervened in the power sector to facilitate the deployment of enabling infrastructure. Summarily, the sum of N2.53 billion was disbursed to Distribution Companies (DisCos) for their Operational Expenditure (OpEx) and Capital Expenditure (CapEx), under the Nigeria Electricity Market Stabilization Facility – Phase 2 (NEMSF-2). Cumulative disbursement under the NEMSF-2 currently stands at N254.46 billion.”
“Under the National Mass Metering Programme (NMMP), the Bank disbursed N47.82 billion for the procurement and installation of 865,956 meters across the country.”
The decision to therefore freeze the account of some of the MAPs is a surprise considering that NERC only recently extolled the success of Phase 0 of the initiative and revealed it had shortlisted 45 companies for the next phase.
“Our target is to install four million meters for customers. From our experience in phase zero, we want to make sure that the manufacturers can deliver before allocation is made.
“I am sure that we will be able to finish the assessment by the end of this month and it will be finalised by the Procurement Implementation Unit.
“We are hoping that before the end of August, we will begin to see meters from our local manufacturers going to the electricity Distribution Companies and then to end-user customers.”
The Central Bank’s request to freeze the accounts of some of the MAPs suggests the initiative may have been miss managed, putting into question the need for the government to continue funding the sector.
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