NERC suspends board of IBEDC over virement of N6bn CBN loan
The Nigerian Electricity Regulatory Commission (NERC) on Wednesday suspended the entire management board of the Ibadan Electricity Distribution Company (IBEDC) for failing to recover about N6 billion loan the Disco allegedly transferred to its core investor, the Integrated Energy Distribution and Marketing Group (IEDMG) Ltd, from a loan the Central Bank of Nigeria (CBN) gave to it to upgrade its operations.
The action, which was unexpected, at least to operators in Nigeria’s electricity industry, came after the regulatory agency in September 2017 fined the Disco N50 million for giving out the loan worth N6 billion from the N11.367 billion it received from the CBN Nigeria Electricity Market Stabilisation Fund (NEMSF).
But a board member of the Disco, who spoke to THISDAY about the development on condition of anonymity, claimed the loan had been recovered and that a transmittal of a letter in this regards to the NERC was delayed by the recent Islamic holiday observed in the country.
The board member however stated that NERC would get the letter before the close of work Wednesday, adding that the Bureau of Public Enterprises (BPE), which sold the assets during the power sector privatisation, has equally expressed its reservations with the development.
NERC’s Head, Media Unit, Mrs. Vivian Mbonu, in a statement on Wednesday said the regulator took the decision after IBEDC failed to recover the N6 billion loan.
It however did not state how long the suspension would last and what stop-gap measures had been put in place to keep the operations of the Disco going while its management board remains suspended.
“The Nigerian Electricity Regulatory Commission (NERC) has, vide its Order No: NERC/181/2018 of June 19th 2018, suspended the Board of Directors and other key management staff of Ibadan Electricity Distribution Company (IBEDC) 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,” said Mbonu in the statement.
“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.
“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.”
NERC also said in 2017 that it was investigating the other 10 Discos to determine how they applied the NEMSF in their operations.
