Nigerian House of Representatives summons CBN and DisCos over alleged mismanagement of $321 million electricity loans

The Public Accounts Committee of the Nigerian House of Representatives has summoned the Central Bank of Nigeria (CBN) and 11 electricity distribution companies (DisCos) regarding the alleged mismanagement of $321 million and N18.2 billion loans intended for accelerated transmission and distribution infrastructure projects.

The summons were issued by Bamidele Salam, the committee chair, during a hearing where Sule Abdulaziz, the Managing Director of the Transmission Company of Nigeria (TCN), appeared before the committee in Abuja.

These entities are required to appear before the committee on November 8.

The investigation was initiated following a petition that raised concerns about the alleged misallocation of funds disbursed to the DisCos by the CBN at the request of the TCN.

Chairman Salam has requested comprehensive information about the loan disbursements, procurement procedures, the involvement of DisCos in these projects, the current status of the projects, and the loan repayment structure for the beneficiaries.

He emphasized the importance of ensuring that public institutions adhere to the law and international best practices, ensuring the efficient utilization of funds.

During his appearance, Mr. Abdulaziz clarified that the funds were directly transferred to the DisCos by the CBN for the execution of various projects, with the intention of repaying the loans using TCN’s revenue.

However, concerns have been raised regarding the repayment arrangement.

Mr. Abdulaziz explained that the electricity sector has faced challenges, leading to complaints from distribution companies about inadequate supply from TCN. To address this issue, critical projects were initiated to improve electricity distribution in Nigeria. Financial institutions and regulatory bodies, including CBN and NERC, were involved in the financing and oversight of these projects.

The TCN played a beneficiary role, while the DisCos were responsible for project execution. Loan repayments were intended to be amortized monthly from TCN’s revenue.