A compensation statement is only as useful as the records and assumptions behind it. Schedule 13 of Nigeria's Mini-Grid Regulations 2026 gives the parties a form; completing it still requires decisions about the assets, valuation basis and treatment of funding.
This guide is for the operator preparing a statement and the distribution company reviewing it. It explains the evidence each column needs, then works through an invented site. The example is an interpretation of the published framework, not a Commission-approved valuation method or a prediction of an award.
Read this before calculating
Three conclusions frame the exercise. First, section 21(3)(b) describes a transfer of distribution assets; our example therefore excludes the generation plant from Table A. Second, funding attribution can materially change the result. Third, equipment telemetry supports operating history and condition but cannot supply the accountant's cost basis or the billing ledger's revenue.
Confirm the applicable regulator and instrument first. Section 4 addresses state jurisdiction and continuing federal rules; a transfer of oversight alone does not establish that every federal provision has ceased to apply. Also establish the chosen transition arrangement. Conversion or a service agreement is not the same transaction as a distribution-asset transfer.
For a shorter introduction to recordkeeping responsibilities, read 60 Business Days. The practical reading path here is the column checklist, the worked site and the review questions. The historical and product notes at the end are supporting context.
What actually transfers
Published rule: section 21(3)(b) refers to distribution assets. Section 21(5) attaches the compensation principles to that transfer option, with Commission approval. Schedule 13 asks for asset classification and supporting valuation information.
Our interpretation: wires, poles, meters, switchgear and associated network works enter the example's Table A. The PV array, battery, generation inverters and genset do not. This is not a conclusion that every component can be classified without argument. The treatment of auxiliary equipment and the reach of development and construction costs need confirmation.
Action: agree an asset-by-asset transfer schedule before calculating the total. Identify generation assets retained by the operator and how their future use will be handled. Do not assume either that the whole plant must transfer or that its cost can automatically be recovered through another table.
Smaller sites need the same care about status. Section 8 permits an isolated system not exceeding 100 kW to seek a permit or registration. Section 21(12) addresses registered sites, while subsection (13) refers more broadly to the transition procedure. Capacity alone does not resolve the site's rights.
The form, column by column
Use the following as a preparation checklist. The evidence examples are recommendations; the published schedule and applicable directions govern the filing.
| Column | Record to prepare | Question to resolve |
|---|---|---|
| 1. Asset category | Classification tied to the transfer schedule | Is this asset within the agreed transfer scope? |
| 2. Name or description | Equipment specification and location | Can both parties identify the same item? |
| 3. Asset ID or reference | Stable register ID | Does it match historic filings and inspection records? |
| 4. Number of units | Inventory and inspection count | Are replaced or removed items excluded? |
| 5. Date of commissioning | Commissioning or replacement record | Which date applies to this component? |
| 6. Historical cost | Invoice and capitalisation reconciliation | How were bundled contracts and currency conversions allocated? |
| 7. Indexation factor | Documented index and approval basis | Which index, dates and direction apply? |
| 8. Indexed historic cost | Reproducible calculation | Does the factor apply to the correct cost base? |
| 9. Replacement cost basis | Equivalent-equipment valuation support | Is the comparison like for like? |
| 10. Accumulated depreciation | Life, method and elapsed-time calculation | Is depreciation expressed on the appropriate basis? |
| 11. Net indexed historic cost | Indexed cost less corresponding depreciation | Can the result be reproduced? |
| 12. Net replacement cost | Replacement value and depreciation calculation | How is remaining life established? |
| 13. Contributions | Grant, donor and customer funding records | How is site-level funding attributed to each asset? |
| 14. Excluded portion | Funding conditions and exclusion method | Has the same contribution already reduced cost elsewhere? |
| 15. Compensable amount | Reconciliation of the chosen basis and exclusions | Is the comparison applied per asset or in aggregate? |
Schedule 13 also has tables for exclusions, unrecovered development and construction costs, revenue and transition costs. Support each with its own records. An amount placed in one table must not be recovered again through another.
Inputs that need agreement
Index and useful lives. A field asking for an indexation factor does not choose an index for the parties. Obtain the current applicable tariff tool and Commission directions; record their version. Do not mix depreciation in historical naira with an indexed cost without explaining the basis.
Replacement value. State the equivalent equipment, pricing date, condition assumptions and depreciation method. A supplier quote alone does not settle the compensable amount. Schedule 8 offers valuation context for network assets, but its application to a Schedule 13 claim should be confirmed rather than assumed.
Funding attribution. A site-level contribution does not automatically identify the share of each pole or meter. Start with the funding agreement and any donor conditions or Commission direction. If these leave a method unresolved, propose it explicitly. Different assumptions can have a large effect; that does not make every assumption equally acceptable.
Comparison level. Selecting the higher value asset by asset can produce a different total from comparing aggregate values when different assets favour different methods. Confirm the intended approach. In the example below, replacement value is higher on every line, so that particular ambiguity does not change the result.
A worked site
Every input is illustrative. Assume a permitted isolated site with 180 kWp of PV, 400 kWh of storage, a 100 kVA genset, five kilometres of low-voltage network and 320 meters. Commissioning is 1 September 2022; the assumed transfer is 1 March 2027, four and a half years later.
Historical cost is ₦381m, split into ₦98m of distribution equipment and ₦283m of generation equipment. These are invented costs, not a benchmark quotation. The index is assumed to be 1.90. Useful lives are assumed at 25 years for network and civils, 15 for switchgear and 10 for meters. They are not stated here as approved lives for a real site.
For each valuation limb, straight-line depreciation uses the same elapsed period and assumed useful life against that limb's own cost basis. All table values are ₦m, rounded to one decimal place; calculations use unrounded values.
| Asset | Class | Historical cost (₦m) | Indexed ×1.90 | Accumulated depreciation | Net indexed | Replacement basis | Net replacement |
|---|---|---|---|---|---|---|---|
| LV network, 5 km: poles, conductor, service drops | distribution | 60.0 | 114.0 | 20.5 | 93.5 | 118.0 | 96.8 |
| 320 prepaid meters | metering | 24.0 | 45.6 | 20.5 | 25.1 | 52.0 | 28.6 |
| Switchgear, protection, distribution boards | control | 8.0 | 15.2 | 4.6 | 10.6 | 17.0 | 11.9 |
| Street lighting and network civils | auxiliary | 6.0 | 11.4 | 2.1 | 9.3 | 12.0 | 9.8 |
| Total | 98.0 | 186.2 | 47.7 | 138.5 | 199.0 | 147.1 |
The unrounded net indexed total is ₦138.548m; net replacement is ₦147.100m. Under these assumptions, the pre-exclusion comparison favours replacement value. The result says nothing about the appropriate index or replacement basis for another claim.
Assume a site-level grant of ₦150m and, solely for this scenario, a proportional exclusion of 150/381 from the transfer value. That leaves ₦89.187m. If a different funding attribution excludes the entire network value, that component would be zero. The funding conditions and approval process must decide the treatment; the operator cannot select a method merely because it gives a higher claim.
For the additional components, assume ₦23m of eligible development costs, with 45% already recovered: ₦12.65m remains. Assume ₦5.1m of approved transition costs. Revenue is an assumed 320 connections × 28 kWh per month × 12 months × ₦230/kWh, or ₦24.730m. This is a calculation assumption, not a substitute for twelve reconciled monthly revenue rows.
| Component | Illustrative amount (₦m) |
|---|---|
| Transfer value after proportional exclusion | 89.19 |
| Transition costs | 5.10 |
| Unrecovered development costs | 12.65 |
| Twelve-month revenue | 24.73 |
| Total, rounded from unrounded inputs | 131.67 |
If the transfer-value component were entirely excluded while the other assumed components remained eligible, the illustrative total would be ₦42.48m. In that scenario revenue is the largest component; in the proportional scenario it is not. That is the correction to the earlier claim that revenue is generally the largest line.
No generation-plant construction cost has been added through Table C here. If a party proposes such a claim, it needs an explicit eligibility and recovery analysis. A sensitivity calculation is not approval to claim the amount.
Dates also matter. The age tiers can affect entitlement to additional components, so assess a delayed transfer explicitly, including boundary wording and any protected tenure. The sixty-business-day referral threshold does not itself fix the transfer date.
Reconcile the records before filing
Start with the asset register and previous regulatory filings. Explain departures rather than rewriting history to match the claim. Retain the original, the correction and the reason.
Bundled EPC contracts need an allocation to individual assets. A grant already netted against recorded cost must not be deducted again. Development costs capitalised into equipment must be checked for overlap with a separate claim. Currency conversions need a stated date and method.
Revenue needs a reconciliation between the billing ledger, prepaid balances, energy delivered and collections, under the applicable accounting method. Cash received and revenue recognised can differ. A meter record supports that reconciliation; it does not replace it.
Assign each unresolved input to an owner: finance for cost and funding records, engineering for identity and condition, operations for service history, and the regulatory lead for the applicable approvals. This turns an unbounded document search into a reviewable work plan.
Make the electronic record reviewable
Keep the source, event time, receipt time, calculation method and correction history. Disclose outages and missing readings. A reviewer should be able to move from a reported total back to the records that produced it.
Records held by third parties—filings, bank statements, invoices and commissioning certificates—can provide independent corroboration. Continuous operating records can add condition and service history. A later reconstruction needs its source and method explained; it is not automatically worthless, just as continuous telemetry is not automatically admissible or accurate.
Section 84 of the Evidence Act is relevant to computer-produced evidence in court. The applicable procedural and certification requirements need to be addressed for the actual proceeding. A software hash or a monthly meter reading does not, by itself, establish legal admissibility. The operational recommendation here is to preserve provenance and make derivation reproducible, not to promise a hearing outcome.
Questions for the distribution company
Before debating individual amounts, confirm the regulator, transition option and asset scope. Then check equipment compatibility, condition and the support for the proposed valuation. If the acquired assets are to enter a regulated asset base, consider the applicable tariff-review rules and treatment of contributions separately; approval of one amount should not be assumed to settle every later filing.
Request the same reconciliations the operator should already have prepared. Where the parties disagree, record the disputed assumption and its effect. A disagreement about the index is different from an invoice that cannot be found.
Section 21 also addresses continued operation pending approval and payment arrangements, and interest following the applicable payment deadline. Distinguish those provisions from the sixty-day referral threshold. A claim should keep the negotiation, transfer, approval and payment dates separate.
Supporting context: what changed in the rules
The 2016 and 2023 frameworks used different combinations of depreciated value and revenue or profit. The 2026 text introduces the two-limb Compensable Transfer Value and tenure-related additions, alongside contribution treatment and Commission approval. Historical summaries should not be used to fill a current form.
For an actual transaction, begin with the current regulation, schedules, funding terms and directions. The published framework leaves inputs that the parties must obtain or resolve; filling those gaps silently is the central risk this guide addresses.
Supporting context: Gen318's role
The original article included an implementation assessment dated 27 August 2026. It described provenance, quality checks and frozen reports, alongside limitations in retention, clocks, offline timestamps and device authentication. Those deployment details require a current deployment review before being used as an assurance statement; this editorial revision does not certify them.
The durable boundary is narrower. An operations platform can contribute condition and service records with their coverage and calculation method disclosed. It cannot infer an approved cost basis, funding attribution or revenue ledger from equipment telemetry. The accountant, operator and competent authority still have distinct responsibilities.
Before using any platform's export, check source identity, timestamp meaning, retention, duplicate handling, missing-data treatment and the ability to reproduce totals. Assess what is deployed at the site, not just what the software repository supports.
Sources and correction record
- NERC Mini-Grid Regulations 2026, especially sections 4, 8, 14 and 21–23.
- NERC schedules, including Schedule 13, used for the column checklist and supporting tables.
- NERC tariff-review regulations, for the separate regulated-asset-base question.
- Evidence Act section 84 discussion, University of Ibadan Law Journal, and 2023 amendment briefing. These are commentary, not a determination of admissibility in a particular proceeding.
- NERC Mini-Grid Regulations 2023 and IEA record of the 2016 framework, for historical context.
- Schedules to the Mini-Grid Regulations 2023, for comparison with the current handover and compensation form.
- Metering Code, 3rd edition, for the meter records that may support an energy and revenue reconciliation.
- Dickson v Sylva discussion, secondary commentary on section 84 certification and oral evidence; it is not advice on a Commission proceeding.
- Analysis of the 2026 regulations, an external interpretation used as context and checked against the primary regulation.
- Report on state-market transfers, dated context for why the competent-regulator question must be resolved before applying the federal form.
Revised 4 September 2026. Added the evidence checklist, separated rules from interpretation, corrected the worked total using unrounded inputs, and qualified asset scope and registered-site treatment. The supporting product assessment remains dated to its original review rather than presented as a fresh deployment audit.