NERC Fines Ibadan DisCo N50 Million For Diversion Of N5.7 Billion Loan

The Nigeria Electricity Regulatory Commission (NERC) has penalised the Ibadan Electricity Distribution Company (IBEDC) with the sum of N50 million fine for misappropriation of N5.7 billion of the N11.367 billion loan it got from the Federal Government.

The N5.7 billion is the balance of the inappropriate loan of N6 billion granted by the utility (IBEDC) to IEDMG, the core investor in Ibadan Electricity Distribution Company plc.

Further, NERC directed that the outstanding loan  balance is to be recovered with a 10 percent interest.

NERC Spokesman, Dr. Usman Arabi, in a statement to the effect of the fine said:  “Following the outcome of an open book review conducted on the financial records of Ibadan Electricity Distribution Company plc (IEDC), the Nigerian Electricity Regulatory Commission found the company wanting on two grounds of inappropriate financial transactions and was subsequently fined a sum of N50m.

“The fine was on account of its failure to secure a refund of an interest free loan the Board of IEDC granted to its core investor group. Information from the Commission indicates that the industry regulator is also reviewing the utilisation of NEMSF in all other distribution companies.

“The Commission had, vide its Order 173, directed IEDC to recover the sum of N5.7 billion being the balance of the inappropriate loan of N6bn granted by the utility to IEDMG, the core investor in Ibadan Electricity Distribution Company plc.

“The loan was sourced from a total sum of N11.367 billion disbursed to IEDC under the Nigeria Electricity Market Stabilisation Fund granted by the Central Bank of Nigeria towards the improvement of infrastructure in the company including metering. The repayment of the loan to CBN by the 11 distribution companies has continued to be made as a first charge on the revenues of the companies.

“The Commission has reaffirmed that it will pursue the full recovery of the misused funds from IEDC including the accrued interest at NIBOR + 10%.”