Nigerian Firm to Raise $1.2bn in 3 Years to Bridge Metering Gap

A Nigerian firm is looking to raise N480 billion ($1.2 billion) in the next three years in order to purchase electricity meters and assist power distribution companies plug a revenue gap in Africa’s biggest country by population.

Less than 10% of Nigeria’s 41 million households have their electricity consumption metered, and 50% of those metres are faulty, said PricewaterhouseCoopers. Power distributors consequently are compelled to estimate bills, causing disputes which prolong payments.

Meter Assets Finance and Management Co. plans to call a halt to that trend by raising funds to buy and provide metres to end-users said Onion Omonforma, chief executive of New Hampshire Capital.

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New Hampshire, Kairos Investments Africa and FBN Quest are helping to package the venture called MAPCo, for investors to either buy shares or inject debt into the firm.

“The electricity distribution firms will then have the money to go back and buy more meters and the cycle continues, paving the way to close the meter gap,” he said.

MAPCo is expected to recover the cost of the meters from customers at a premium over the next decade. The metres will be given to Discos once they are paid off.

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MAPCo intends to issue a N100 billion bond next year, said Omonforma. It will involve roadshows in Europe and the U.S. while also including local institutional investors.

The investment securities will be supported by the underlying prepaid metre, which have “a “stable and long useful life,” Ewaen Imohe, chief executive of Kairos Investments Africa said.