Illegal N6bn loan: IBEDC management, board remain suspended —NERC

Twenty two days after, the Nigerian Electricity Regulatory Commission (NERC) has insisted that the board and management of Ibadan Electricity Distribution Company (IBEDC) remain suspended for giving an unauthorised loan of N6 billion to its core investor, the Daily Trust exclusively reports.

Industry sources on Tuesday said NERC refused to cancel the suspension Order and would not reverence the Bureau of Public Enterprises (BPE) who sought for the cancellation and two weeks since June 20 to intervene. Ibadan DisCo after failed remediation, got a court injunction on maintaining the status quo.

The development of seeking injunction against NERC did not augur well with the Minister of Power, Works and Housing, Mr Babatunde Fashola, we gathered. At a briefing last Monday, Fashola alluded to this saying DisCos go to court to seek injunction against a regulator that was performing its statutory function and that as a matter of principle, court should not honour such.

He specifically referred to the unauthorised Ibadan DisCo loan saying, “Through CBN, government made available the sum of N213bn to the power sector on concessionary interest rate below the market rate to the GenCos and the DisCos.

“We are all aware that recently, NERC revealed the unauthorised use of money by Ibadan DisCo and has taken some regulatory measures,” Fashola said.

Ibadan DisCo drew over N10bn from the N213bn loan twice under the Nigeria Electricity Market Stabilisation Funds (NEMSF). It then gave N6bn to its core investor, Integrated Energy Distribution and Marketing Group (IEDMG) Ltd contrary to extant market rules in the Nigerian Electricity Market (NEM).

IEDMG was also the core investor in Yola Electricity Distribution Company (YEDC) but declared a force majeure in 2015 and returned the control of the DisCo to BPE.

The Order No. NERC/181/2018 of June 19, 2018 said the IEDMG, the core investor in IBEDC took the loan granted by IBEDC from funds released to all DisCos to improve the networks and reduce Aggregate Technical, Commercial and Collection losses (ATC&C).

The Commission had earlier fined IBEDC N50 million on September 18, 2017 for non-compliance with Order No NERC/173/2017 directing the company to fully recover the outstanding sum of N5.7bn being the balance of the loan granted by the utility to IEDMG.

The BPE in its letter of June 20, 2018 referenced BPE/LSCS/NERC/2018/26, sought amicable resolution of the issue, appealing that NERC cancelled the Order suspending Ibadan DisCo.

But a power sector source privy to NERC’s latest decision after the injunction said, “The management remains suspended. They ran to court and got an injunction that the status quo remains. They are now interpreting it to mean that they have not been suspended but what the status quo means to NERC is that it will stop the process of withdrawing the DisCo’s licence but they remain suspended while we consider the option of withdrawing their licence.”

For a seamless operation of the DisCo while the officials remain on suspension, the official said, “After the suspension, within 21 days, they are supposed to constitute a new management and present it to NERC for approval but they have not done that.”

Court issues injunction, stay action till October —DisCo

Speaking to Daily Trust on telephone, Tuesday, the Deputy Managing Director of Ibadan DisCo, Engr. John Ayodele confirmed that they went to court challenging NERC on that, “and an injunction given that status quo should remain the same till October 2018 when the judge will hear it on accelerated hearing.”

On whether the management was still operating, he said, “They (court) didn’t say we should close down, they said the status quo remains the same. As far as we are concerned, they said we should continue.”