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E D M PREPAYMENT SYSTEM

E D M PREPAYMENT SYSTEM. MOZAMBIQUE – GEOGRAPHIC LOCATION MISSION BACKGROUND OF COMMERCIALIZATION REORGANIZATION OF THE COMMERCIAL CYCLE PROCESS CONSTRAINTS INTRODUCTION OF PREPAYMENT SYSTEM - MOTIVATIONS IMPLEMENTATION FINANCING PREPAYMENT PROJECT REQUIREMENT

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E D M PREPAYMENT SYSTEM

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  1. E D M PREPAYMENT SYSTEM

  2. MOZAMBIQUE – GEOGRAPHIC LOCATION • MISSION • BACKGROUND OF COMMERCIALIZATION • REORGANIZATION OF THE COMMERCIAL CYCLE • PROCESS CONSTRAINTS • INTRODUCTION OF PREPAYMENT SYSTEM - MOTIVATIONS • IMPLEMENTATION • FINANCING • PREPAYMENT PROJECT REQUIREMENT • IMPLEMENTATION METHODOLOGY • SYSTEMS COMPARISON • RESULTS • CHALLENGES • CONTRAINTS • STRUCTURE AND NUMBER OF CUSTOMERS

  3. MOZAMBIQUE Area: 799 380 km2 Population: 18 Millions Capital: Maputo

  4. MISSION:The operation of the public service of Generation, Transmission, Distribution and Commercializationof electricity in Mozambique, in defence of the interests and to the benefit of the consumer.VISION:With Energy we build the Future

  5. Structure and Total Number of EDM Customers

  6. Background of Commercialization – Before 1995 • High Total Distribution Losses; • Bad debt losses; • Manual billing; • Billing/collection system; • No Commercial Procedures Manual; • Low productivity; • Low quality of service; • Huge customers complains; • high administrative costs.

  7. High Level of Losses - Comments • Frauds; • Bad collection ratio; • Technical losses due to the distribution grid quality; • Until 2003, some customers without meters; • Obsolete meters; • Manual Billing.

  8. Background of Commercialization – After 1995 • More concern about commercial activities; • Creation of the Commercial Department as a Central institution; • Implementation of the Loss reduction Projects: • -Restructuring of the Commercial activities; -Prepayment Projects. • Implementation of Marketing activities; • More readings and billing quality; • More concern about inspections and premises disconnections.

  9. Reorganization of the Commercial Cycle (Post Paid System) • Readings; • Billing; • Invoices Distribution; • Collection; • Inspections; • Disconnections; • Reconnections.

  10. Process Constraints • Quality of readings; • Quality of billing / number of complained Bills; • Hard to locate customers premises; • Hard to achieve a good collection Ratio; • Debt recover difficulties; • High management cost; • Non effective for demand side management.

  11. INTRODUCTION OF PREPAYMENT SYSTEM - Motivations • High Total Distribution Losses (about 43% in 1995); • Bad debt (from domestic and public institutions); • Bad readings • Low quality of service; • High running costs associated to the customers management; • Low income Customers.

  12. Implementation • Pilot Project in 1995, for 500 customers in Matola city; • A similar project was carried out in Maputo city, for 5.000 customers, in 1996; • The huge number of meters have been installed since 2002, in extent of the B.O.T projects; • Other projects;

  13. Financing • The Company adopted the following financing schemes: • Turn key Projects; • Projects financed by own funds; • Projects financed by commercial credits and others (grid expansion credits). Implementation Criteria • Difficult access installations; • Low purchasing power customers; • Seasonal customers.

  14. Requirements of a Prepayment Project • IT: • Sales and management system (Software); • System Master Station (SMS Hardware); • Posts of sale; • GIS/GPS System;

  15. Equipment and Services • Aerial photograph; • Prepayment meters; • Ready Boards; • Communications; • Private vending posts; • Training; • Customers information and advertisement; • Revision of the commercial procedures; • Management.

  16. Implementation Methodology • Geographical definition of the implementation area; • Establishment of the Post of Sales sites; • Area Mapping; • Staff training; • Installation of the hardware and the vending system; • Installation of the hardware and GIS/GP; • Customers information and advertisement; • Meters installation; • Storage of the meter geographic information.

  17. SYSTEMS COMPARISON

  18. COLLECTION AND SALES COMPARISON

  19. CUSTOMER QUALITY SERVICE COMPARISON

  20. Results • The total distribution losses decreased from 43%, in 1995 to 18%, in 2005.

  21. Number of Customers Dez/2005

  22. Results • The number of customers increased to 130.000, in 2005; • The quality of service improved; • The company cash in flow increased; • The collection Ration improved from 75%, in 1995, to 94%, in 2005; • Ease to recover debt through the system.

  23. Challenges • To cover all domestic customers with prepayment system (this is also EDM Police); • installation of spit meters; • To reduce the fraud customers premises vulnerability; • Implementation of AMR in Beira City to monitor the losses; • AMR to cover Maputo and Matola, for the same purpose.

  24. Constraints • Huge initial investment (management system and meters); • Meters´ life expectation short; • High replacement meters cost.

  25. WITH ENERGY WE BUILD FUTURE

  26. THANK YOU FOR THE ATTENTION! Questions/suggestions?

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