By Obas Esiedesa
The Nigerian Electricity Regulatory Commission (NERC) has suspended the board and management of the Ibadan Electricity Distribution Company (IBEDC) for failing to recover a N5.7 billion loan it granted to its owners.
The loan which was advanced by IBEDC to its core investor, Integrated Energy Distribution and Marketing Group (IEDMG) Ltd, was taken from funds released to the utility as part N213 billion intervention fund set up by the Federal Government to stabilize the Nigeria Electricity Supply Industry (NESI).
NERC in a statement by the Head Media Unit, Mrs Vivian Mbonu the sanction was conveyed in its vide its Order No NERC/181/2018 of June 19th 2018.
She said the suspension of the “Board of Directors and other key management staff of Ibadan Electricity Distribution Company (IBEDC)” was “on account of the company’s default in the recovery of an inappropriate shareholder loan of N6 billion granted to Integrated Energy Distribution and Marketing Group (IEDMG) Ltd by the utility”.
“IEDMG is the core investor in IEBDC following the privatisation of electricity distribution companies by the Federal Government. The loan was granted by IBEDC from funds released to all DisCos by the CBN under the Nigeria Electricity Market Stabilisation Funds (NEMSF) for the purpose of improving the networks and reducing aggregate technical, commercial and collection losses”.
She said the Commission had earlier fined IBEDC a sum of N50 million on the 18th September 2017 for non-compliance with Order No NERC/173/2017 directing the company to fully recover the outstanding sum of N5.7 billion being the balance of the loan granted by the utility to IEDMG.
The Central Bank of Nigeria (CBN) had in November 2014 in collaboration with the Federal Ministry of Petroleum Resources and NERC signed a memorandum of understanding that set up a N213 billion fund for the sector.
The facility, which was also in partnership with Deposit Money Banks (DMBs) in Nigeria, was intended at addressing shortfalls in power sector revenues caused by needed adjustments in electricity tariff basic gas debt and in the process reset the economics of the power sector.