NERC Dissolves Kaduna DisCo Board Over N456.5bn Debt, 71.9% Losses

…Appoints interim administrator

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) and appointed the company’s managing director/chief executive officer, Dr Abubakar Umar Hashidu, as interim administrator for an initial six-month period, citing extensive financial, operational and regulatory failings.

The action, set out in Order No. NERC/2026/086 and effective from August 10, 2026, followed an inquiry by NERC and consultations with industry stakeholders, including the Bureau of Public Enterprises (BPE).

NERC said KAEDC is in a “grave situation” marked by prolonged market and regulatory default, inadequate investment, poor operational and commercial performance, insufficient assets relative to liabilities and an inability to present a credible recovery plan.

In the Order signed by NERC , chairman, Musiliu O. Oseni and commissioner, Legal, Licensing & Compliance, Dafe C. Akpeneye, said, “The Commission cannot allow continued erosion of market stability and consumer welfare by a Distribution Company that is unable or unwilling to meet its obligations.”

“The measures in this order are necessary to protect market integrity and position KAEDC for stabilisation and recovery.”

The regulator put the DisCo’s cumulative market obligations since privatisation at about N456.5 billion as of May 2026 — approximately N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and N41 billion owed to the Nigerian Independent System Operator (NISO).

In addition, KAEDC has about N14.26 billion in non‑market statutory and third‑party obligations.

NERC said since ASI Engineering Limited (ASI) assumed operational control of KAEDC in June 2024, the DisCo incurred an additional N118.6 billion in market debt up to May 2026.

“The core investor and operator have repeatedly failed to provide acceptable payment bank guarantees and a credible repayment plan as required under the Vesting Contract and Market Rules,” the Commission said. “This persistent non‑compliance places undue burden on NBET and the wider market.”

KAEDC’s remittance performance was also criticised. In 2025, the DisCo paid only 41.93 per cent of adjusted market invoices, leaving a market shortfall of around N46.71 billion, the regulator said.

NERC linked poor remittances to very high Aggregate Technical, Commercial and Collection (ATC&C) losses, which stood at 71.88 per cent in the 2025 review period. “Effectively, KAEDC was only able to account for about 28.2 per cent of the energy it received and delivered to end‑use customers in 2025,” the order said.

The Commission faulted ASI for failing to meet its capital injection commitments. Actual capital expenditure for KAEDC in 2025 was about N2.48 billion, against a minimum required provision of N24.51 billion — roughly 10 per cent performance, NERC said. The regulator added that the actual spend followed derogations and forbearances previously granted.

Metering performance was described as “abysmally low.” Meter coverage of KAEDC’s customer base has remained between 33.26 per cent and 35.54 per cent since ASI took over, despite interventions to support metering rollout.

NERC recalled that its conditional no‑objection of January 18, 2024 approved ASI’s proposed acquisition of a 60 per cent equity stake in KAEDC, with Akanksha Power and Infrastructure Limited (APIL) named as a technical partner. That approval was subject to multiple conditions, including evidence of APIL’s capacity to operate in Nigeria, a substantive technical support and turnaround proposal, a compliance plan to meet NERC’s key performance indicators, a credible management team and a credible ATC&C loss‑reduction trajectory, as well as plans for bank guarantees to NBET and the market operator.

“Despite repeated engagements and deadlines, these conditions remain substantially unmet,” NERC said. “The absence of demonstrable compliance compels the Commission to intervene.”

On this basis, NERC removed the existing KAEDC board and all its directors from office. The Commission appointed an interim board chaired by Dr. Abdullahi Garba. Other interim members are Engr. Francis U. Agoha, Mr. Aliyu E. Aliyu, Major General Henry E. Ayamasaowei (rtd), Dr Haliru Dikko and Mr. Ayodeji A. Gbeleji; the BPE will serve as special directors.

Dr Hashidu, the company MD/CEO, was appointed a special director and designated administrator for an initial six‑month term. In that capacity he will oversee day‑to‑day operations, implement interim board resolutions and directives from NERC, safeguard KAEDC’s assets and records, and handle matters reserved for Commission or interim board approval.

NERC also withdrew Key Yardstick Licence (KYL) approvals previously issued to KAEDC management and directed affected staff to present themselves for revalidation.

During the transition, the Commission imposed restrictions on major financial and corporate actions by KAEDC. These include prohibitions or limits on borrowing, disposal or transfer of material assets, related‑party transactions, changes to senior management remuneration, appointment or removal of senior officers, and alterations to the company’s capital structure.

The administrator has been directed to submit a costed 12‑month stabilisation plan within 60 days. The plan must cover cash‑flow controls, market remittances, collections, metering, energy accounting, loss reduction, service reliability, safety, customer complaints, capital expenditure, procurement, staff obligations and legacy liabilities.

“NERC expects a credible, implementable stabilisation plan that restores operational integrity and market confidence,” the regulator said. “Failure to achieve demonstrable progress will require the Commission to consider transfer to an alternative core investor.”

NERC said the special transition period will continue until the earlier of: the transfer of the company to a replacement core investor approved by the Commission; or further order varying, extending or terminating the intervention.