Implementation of the Power Consumer Assistance Fund (12194)

Client: Nigeria Electricity Regulatory Commission (NERC)

Detailed description of project:

When the electricity industry of Nigeria was reformed through a privatization exercise by the Federal Government of Nigeria, one of the key associated components was the implementation of a cost reflective tariff, as required by the 2005 Electric Power Sector Reform Act, in order to support private sector investment in the sector.

Foreseeing the negative impact a tariff revision may have on the poorer consumers of Nigeria, the Act also called for the establishment of a Power Consumer Assistance Fund (PCAF) to ensure poorer consumers are able to access electricity at affordable rates through subsidization of the cost reflective tariff.

CPCS was selected by the Nigerian Electricity Regulatory Commission (NERC) through a public procurement process to advise on the structuring and implementation of the PCAF.

CPCS completed the following tasks:

• Reviewed international best practice in electricity subsidy and experience in Nigeria with subsidy
• Conducted a needs assessment of Nigerian electricity consumers, targeting poor consumers to be deemed to be eligible for subsidy
• Structured the fund and administrative and accounting procedures and funding of PCAF
• Drafted a code for the implementation of PCAF.