Meter makers’ lawsuit puts $500m World Bank power project at risk

A court injunction secured by the Association of Meter Manufacturers of Nigeria (AMMON) has emerged as the biggest threat to Nigeria’s $500 million Distribution Sector Recovery Programme (DISREP), with the legal action stalling the procurement of 1.55 million smart meters.

The warning was contained in the World Bank’s latest Implementation Status and Results Report, which noted that although the programme retains a “Moderately Satisfactory” implementation rating, the litigation has become its most significant implementation risk.

According to the report, AMMON obtained the injunction on April 30, arguing that the international procurement process for the meters sidelines local manufacturers and undermines Nigeria’s drive for indigenous industrial development.

The legal action has prevented the opening of bids for the second phase of the International Competitive Bidding (ICB2) process covering 1.55 million smart meters.

As a result, the Transmission Company of Nigeria’s project implementation unit has postponed the bid submission deadline three times, with the latest extension shifting it to June 25, 2026, while discussions continue to resolve the dispute.

The World Bank warned that if the litigation persists, the ICB2 procurement may have to be cancelled to avoid further delays, rising costs and market uncertainty.

Meanwhile, contracts for the local procurement of 217,000 smart meters through the National Competitive Bidding process have reached an advanced stage after receiving comments from the Attorney General of the Federation.

However, the Bureau of Public Enterprises (BPE) said the contracts would only be signed after the court injunction is lifted.

Despite the setback, the World Bank said implementation under the first phase of the international procurement programme continues to record progress.

As of June 15, 2026, about 1.23 million smart meters had been manufactured, with 1.03 million already shipped to Nigeria and more than 482,000 installed nationwide, up from 365,000 recorded during the programme’s mid-term review in April.

The report also highlighted improvements in other areas of the electricity sector.

It said about 530,000 people had gained direct access to electricity through DISREP’s contribution to Mission 300, while more than three million electricity customers had been mapped under the Geographic Information System initiative.

The country’s metering gap has narrowed to 57.27 per cent, while billing efficiency has improved to 82.02 per cent.

The World Bank, however, noted that disbursement under the project remains low, with only $87.34 million—about 17.5 per cent of the $500 million facility—released as of June 2026.

Under the programme’s results-based financing component, the BPE has commenced phased disbursement of a $37.5 million advance released by the World Bank in December 2025 to electricity distribution companies, beginning with Port Harcourt, Ibadan and Yola DisCos.

The report also identified delays in resolving a contractual dispute involving the programme’s Independent Verification Agent, while confirming that preparations are ongoing for an additional $308 million financing package.

Approved in February 2021, DISREP is designed to improve the operational and financial performance of Nigeria’s electricity distribution companies and is expected to run until May 2028.

The World Bank warned that if the procurement of the 1.55 million smart meters is eventually cancelled because of the ongoing litigation, the programme could suffer another major setback, recalling Nigeria’s previous cancellation of $717.7 million in undisbursed funding under the Power Sector Recovery operation.