The Ibadan Electricity Distribution Company, IBEDC, has responded to the Nigerian Electricity Regulatory Commission, NERC’s, suspension of its board and management for failure to recover about N6 billion loan to Integrated Energy Distribution and Marketing Group (IEDMG) Ltd, the company’s core investor.
The loan was allegedly transferred to IEDMG from an an earlier loan advanced to IBEDC by the Central Bank of Nigeria.
The electricity distribution company, in a statement, faulted the action of NERC, describing it as unwarranted.
In a statement announcing the suspension, NERC said: “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”.
It added: “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.”
But, reacting to the suspension order, the Ibadan Electricity Distribution Company said in its statement: “Firstly, as NERC rightly observed in its order, IBEDC complied with the payments of the fine and interest on the pre-takeover expenses as imposed by the Regulatory Authority
“Secondly, NERC and IBEDC reached an understanding in respect of the ¦ 5.7billion outstanding due for payment by Integrated Energy Distribution & Marketing Group Limited, IEDMG.
“The two parties reached an understanding that the repayment of the 5.7 billion plus interests would be made from the refund of the sum due from the federal government on the stalled Yola Electricity Distribution Company transaction. This position was to the knowledge of the Bureau of Public Enterprises, BPE.”