CBN Prohibits Forex Supply For Importation Of Pre-Paid Meters

The Central Bank of Nigeria has stop the supply of foreign exchange to any firm or individual planning to import fully assembled meters into the country.

It also prohibited bringing technologies from outside the country that already exists within Nigeria for the production of prepaid meters.

It said these in its latest guidelines for accessing funding for the mass metering programme.

The Federal Government had recently announced by the programne in a bid to close the ten million metering gap in the country.

The government had stated that it planned to completely deregulate the Nigeria Electricity Supply Industry to be at par with what is happening in the downstream sector of the oil and gas industry, where it has fully removed subsidy.

The CBN said the objectives of the funding guideline is to increase Nigeria’s metering rate, eliminate arbitrary estimated billing and strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity.

The programne is also aimed at supporting Nigeria’s economic recovery by creating jobs in the local meter value chain, reducing collection losses and increasing financial flows to achieve 100 per cent market remittance obligations of the Distribution Companies.

The CBN said the move would improve network monitoring capability and availability of data for market administration and investment decision making.

It added that the introduction of the service-based tariff in NESI effective from September 1, 2020, emphasised the need to close the metering gap in the NESI.

The CBN explained that closing of the gap will enhance the efficiency of revenue collection by Discos and thereby facilitate meeting their obligations to other upstream market participants.

It said, “The NMMP CBN facility is restricted to the procurement and deployment of meters and the associated infrastructure (software and hardware) to support the metering network.

“These include, but not limited to procurement of NERC approved meters, payments for installation and deployment of meters, procurement of other metering infrastructure related production and service provision as
may be prescribed by NERC in relevant orders or by prevailing rules and regulations, procurement of backend metering platform and data management systems.

Procurement of fully assembled meters from overseas is prohibited except meters imported by Meter Asset Providers (MAP) already in the country as at September 30, 2020 and verified by NERC; and importation of related metering infrastructure that are currently being produced in the country
is also prohibited.”

On modalities for financing the metering programme, the apex bank stated that the facility granted would have a maximum tenor of ten years but not exceeding 2030.

It said there would be a moratorium on the principal amount for a period not exceeding 24 months from date of loan disbursement.

In terms of sanctions arising from Infractions, there CBN said in the guideline that banks that flout the terms and conditions of the facility would be sanctioned.

For infraction such as diversion of funds, out said this would attract a penalty at the bank’s maximum lending rate at the time of infraction, while
non-rendition of returns or the rendition of false returns would attract penalty.

In the event of default in loan repayment (principal and interest), the CBN guidelines said the bank would have the right to charge commercial interest rate on the amount of default.

For unauthorized withdrawals from revenue collection account, the CBN said the affected bank would be asked to refund the money
within 48 hours of discovery.