The Assets Management Corporation of Nigeria (AMCON) has taken over Ibadan Electricity Distribution Company (IBEDC).
In a memo signed by the Chief Operating Officer (CEO) of the power distribution firm, John Ayodele, it was disclosed therein that AMCON took over the firm over its inability to pay its existing debts.
Even though the management of IBEDC is subjected to change after the take over, staff members of the company have been assured of job security.
What you should know about the Ibadan Electricity Distribution Company
This development is not surprising, as IBEDC has been labelled as an insolvent distribution company.
Amongst other financial misappropriation allegation, the power firm, under the watch of its previous management, failed to comply with a directive from the Nigerian Electricity Regulatory Commission (NERC) , that it should retrieve an inappropriate shareholder loan of N6 billion granted to the Integrated Energy Distribution and Marketing Group (IEDMG) by the utility company.
The unrecovered loan, which was granted by IBEDC from funds released to all DisCos by the Central Bank of Nigeria (CBN) under the Nigeria Electricity Market Stabilisation Funds (NEMSF) for the purpose of improving the networks and reducing aggregate technical, commercial and collection losses, led to the suspension of IBEDC’s board of directors in 2018.
BizWatch Nigeria understands that IEDMG is the core investor in IEBDC, following the privatisation of electricity distribution companies by the Federal Government.
IBEDC has, however, been struggling to function well not only because of its inability to recover the N6 billion inappropriate shareholder loan it granted to IEDMG. But also, the distribution company is owed over N8.5 billion by Ministries, Departments and Agencies (MDAs) of government.
IBEDC, which covers Oyo, Ogun, Osun and Kwara states as well as part of Kogi, Ekiti and Niger states, put the debts owed to it by federal, state and local governments’ MDAs at N7.22 billion, N1.15 billion and N185.12 million respectively.