Electricidade de Mocambique (EdM) is a state-owned electric utility responsible of providing power to more than 1.5 million customers throughout Mozambique. The utility’s financial performance has been suffering as over 14 percent of power is lost each year due to theft by customers and poor management within the utility. As a result, the utility loses an estimated $34.3 million in revenue annually; this significantly limits EdM’s ability to pursue their ambitious goal of adding 400,000 customers each year as well as other investment programs that would improve quality of service to existing customers and expand generation capacity, among other key operational priorities.

An EdM lineman installs a new meter. The utility company places split meters at a high heights to mitigate theft.

Deloitte

Under the USAID SRUC Task Order, a team of U.S., Brazilian, and Mozambican experts and a South African analytics firm are working alongside EdM’s Commercial Department to assess ongoing efforts to reduce commercial losses and improve meter performance. As part of this effort, the team has successfully undertaken the following:

1. Evaluated available metering and commercial system data;
2. Assessed information on the operation and interoperability of systems including communications systems, meter data management systems, commercial billing systems, etc.;
3. Mapped utility processes and organizational structures (including department roles and responsibilities, staffing capabilities, etc.) within EdM specific to metering system management and customer billing systems;
4. Met with departments responsible for developing and managing the utility approach to calculating system losses including the methodology used, inputs required, and quality of outputs received;
5. Conducted site visits to learn first-hand about technologies used in the field, processes followed by crews when installing or maintaining meters, and challenges faced by EdM; and
6. Conducted site visits and exchanges to ESKOM, South Africa’s electric utility, to tour their metering testing laboratories and interview leadership on standard operating protocols to maintain quality.

This work led to the preparation by the SRUC team of a Commercial Metering Strategy and Road Map (PPT 2MB) which details recommended actions that, if taken, will improve the utility’s ability to identify, measure, and mitigate commercial losses. The strategy identifies key drivers of commercial losses, including customers bypassing meters, illegal hook-ups to the network, and fraud. More importantly, the strategy includes technologies needed, investments required, and institutional strengthening necessary for EdM to more accurately identify commercial losses by area (region, city, feeder, and/or transformer-level) and/or by consumer type (residential, industrial, and commercial).

The USAID SRUC team discusses recent meter quality issues with the EdM field personnel.

Deloitte

In addition, EdM has consistently experienced issues with the quality of their meters and meter installation – exacerbating commercial losses and making it difficult to collect data that allows them to properly analyze the source of the problem.

Prior to the SRUC engagement, EdM had been removing a large number of newly-installed meters from the system due to non-performance, and believed the establishment of an in-house meter testing capability would help mitigate the problem.

As part of this work, the SRUC team advised EdM on how to align their testing procedures with international best practice to mitigate its impact on performance. This work included evaluating options on how EdM can best address the large number of meter failures and recommendations for a large-scale meter replacement program (for existing customers) and network expansion program (to connect new customers). In a Metering Laboratory Roadmap report, the SRUC team analyzed the various options for laboratory buildouts and laid out benefits and costs for each scenario for the utility.

USAID and EdM are developing a second phase of work to design and implement priority initiatives identified in the Commercial Metering Strategy and Roadmap in a pilot area of Maputo. Results from the pilot will help the EdM executive team build a business case for investments needed to roll out loss reduction measures to the rest of Mozambique and help attract commercial financing and other donor partners to the effort.