NERC Dissolves Kaduna DisCo Board Over ₦456.5bn Debt Crisis

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) and appointed its Managing Director and Chief Executive Officer, Dr Abubakar Umar Hashidu, as administrator for an initial six-month period.

According to IREPORTERONLINE, the regulatory intervention took effect on August 10, 2026, following an inquiry and consultations with key stakeholders, including the Bureau of Public Enterprises (BPE).

NERC said the decision was driven by what it described as the company’s worsening financial and operational condition, citing prolonged regulatory and market defaults, inadequate investment, weak commercial performance, insufficient assets relative to liabilities and the absence of a credible recovery strategy.

The commission said KAEDC’s cumulative market obligations since its privatisation had risen to approximately ₦456.5 billion as of May 2026.

The outstanding debt includes about ₦415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41 billion owed to the Nigerian Independent System Operator (NISO). The company was also said to have accumulated about ₦14.26 billion in non-market statutory and third-party obligations.

NERC further disclosed that KAEDC incurred an additional ₦118.6 billion in market debt between June 2024 and May 2026, after ASI Engineering Limited assumed control of its operations.

According to the regulator, ASI and KAEDC repeatedly failed to provide acceptable payment bank guarantees to NBET and NISO as required under the Vesting Contract and Market Rules governing Nigeria’s electricity supply industry.

The commission also said the core investor failed to submit a credible plan for clearing the company’s outstanding liabilities.

KAEDC’s poor remittance performance was another major concern cited by NERC. The regulator said the company paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately ₦46.71 billion.

NERC linked the poor performance to KAEDC’s high Aggregate Technical, Commercial and Collection losses, which stood at 71.88 per cent during the 2025 review period.

The commission said the figure meant KAEDC accounted for only about 28.2 per cent of the electricity it received and delivered to customers during the period under review.

NERC also criticised ASI’s capital expenditure performance, saying the investor failed to meet its recapitalisation commitments. KAEDC reportedly recorded actual capital expenditure of approximately ₦2.48 billion in 2025, compared with a minimum provision of ₦24.51 billion, representing just 10 per cent performance.

The regulator also raised concerns about the company’s metering programme, describing its performance as extremely poor. Meter coverage reportedly remained between 33.26 per cent and 35.54 per cent despite interventions aimed at increasing deployment.

NERC said its conditional no-objection issued in January 2024 had approved ASI’s proposed acquisition of a 60 per cent equity stake in KAEDC in partnership with Akanksha Power and Infrastructure Limited, subject to several conditions aimed at improving the company’s operations and financial position.

However, the commission said ASI failed to demonstrate full compliance with the conditions, while several regulatory requirements remained unresolved.

As a result, NERC dissolved the existing board and removed all its directors from office. It subsequently appointed an interim board chaired by Dr Abdullahi Garba, with Engr Francis U. Agoha, Mr Aliyu E. Aliyu, Major General Henry E. Ayamasaowei (rtd), Dr Haliru Dikko and Mr Ayodeji A. Gbeleji, representing the BPE, as special directors.

Hashidu was appointed a special director and administrator of the company for an initial six-month period.

As administrator, Hashidu is expected to supervise KAEDC’s daily operations, implement resolutions of the interim board and directives issued by NERC, protect the company’s assets and records and oversee matters requiring regulatory or board approval.

The commission also withdrew the Key Yardstick Licence approvals previously issued to members of KAEDC’s management team and directed affected personnel to undergo revalidation.

During the transition period, NERC placed restrictions on major financial and corporate decisions by the company. These include borrowing, disposal or transfer of significant assets, related-party transactions, changes to senior management remuneration, appointment or removal of senior executives and alterations to the company’s capital structure.

The administrator has also been directed to submit a costed 12-month stabilisation plan within 60 days. The plan is expected to address cash-flow management, market remittances, revenue collection, metering, energy accounting, loss reduction, service reliability, safety, customer complaints, capital expenditure, procurement, staff obligations and legacy liabilities.

NERC said the intervention would end when the transfer of KAEDC to a replacement core investor approved by the commission is completed, or when the intervention is otherwise terminated, extended or modified through a subsequent regulatory order.