Pre-paid meter scam: CBN sets to freeze account of MOJEC, others, indicts DisCos
In a determined decision to investigate alleged diversion of funds provided to ten Meter Asset Providers by the Federal Government through the Central Bank to fast track the National Mass Metering Programme (NMMP), the apex bank has sought for a court injunction to suspend the business accounts of the affected companies on suspicions that the companies diverted the funds received from the government to other purposes unconnected to meter supplies.
The Meter Suppliers were to work in collaboration with all the Electricity Distribution Companies in the country to provide prepaid meters to consumers. Latest data from all industry sources indicate that less than 50% of consumers have been provided with prepaid meters as required by law and industry standards.
This was contained in a suit filed by CBN on July 20,2022, before the federal high court in Lokoja, Kogi State. According to the apex bank, the order was needed in order to mandate the commercial banks in the country to restrict activities on the 147 accounts operated by Mojec Meter Asset Management Company Limited, Holley Metering Limited, Protogy Global Services and and seven other MAPs, that received power sector intervention funds under NMMP.
The court order is for 180 days to enhance a quick outcome of investigations by the apex bank.
The seven other companies are Integrated Power Nigeria Limited, Turbo Energy Limited, G Unit Engineering Limited, Koby Global Engineering Services Limited, Cresthill Engineering Limited, Energy Systems Limited and Smart Meters Asset Provider Company Limited.
CBN said the controversial funds were provided to the 10 firms for the production and supply of smart meters to Nigerians under the NMMP. The Bank accused Mojec and about nine other Meter Asset Providers (MAPs) of diverting substantial portion of the CBN power sector intervention funds under the National Mass Metering Programme (NMMP) received by them, for other uses through related entities and individuals or companies connected to DisCos and defunct Power Holding Company of Nigeria (PHCN).
The apex bank explained that the diversion of the said funds at a time when the Nigeria power sector is experiencing instability “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.”
CBN noted that it has conducted a preliminary review of the funds, adding that the account suspension and subsequent investigation were necessary to ascertain the flow of the funds made available to Mojec and other MAPs, covering the period between January 1, 2020 to March 15, 2022.
The apex bank said, “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 terminate.
“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,” CBN said.
EnergyDay gathered that the diverted funds by the MAPs, has been attributed to the low penetration of the NMMP specifically meant to eliminate estimated billing regime with target to install the facilities of about one millions electricity customers.
The National Mass Metering Programme initiated by the Federal Government in October, 2020 was aimed at bridging the metering gap in the country’s power sector by December 2021, EnergyDay’s check revealed.
The initiation and implementation of the NMMP for which the Government had provided a N37 billion grant was against the backdrop of the Nigerian Electricity Regulatory Commission’s (NERC’s) decision, in April 2018, to fast-track the rollout of meters to Nigerians through third-party investors, which were later licensed to supply meters to DisCos.
According to the Association of Nigerian Electricity Distributors(ANED), as at October 2021, there were more than 10 million registered electricity users in the country. However,
“Only 41.1 per cent of the customers are metered due to the historical deficit of metering at NESI,” ANED said