N110bn Debt: FG Moves To Sell Kaduna Electric As New CEO Resumes Office

The new Chief Executive Officer (CEO) of Kaduna Electric, Umar Abubakar Hashidu, officially assumed his role yesterday January 8, 2024.

It was confirmed in a statement released by the Head of Corporate Communication, Abdulazeez Abdullahi, on Tuesday morning that a brief handover ceremony took place at the company’s corporate headquarters in Kaduna.

The ceremony was reportedly overseen by the Commissioner for Legal Licensing and Compliance at the Nigerian Electricity Regulatory Commission (NERC), Dafe Okpaneye.

Following the ceremony, Okpaneye expressed gratitude to the former Managing Director for his dedicated efforts over the past 18 months in advancing the company.

He urged Dr Hashidu to utilize the available talent and resources to propel Kaduna Electric to even greater achievements.

Moves To Sell Kaduna Electric

Amid the latest development, the Federal Government, through the NERC, is mulling a planned sale of the sixth-largest power distribution utility, which is struggling with a debt of N110 billion ($130 million).

Naija News learnt that the decision was considered after the company failed to achieve profitability under the management of lenders who took over the company less than two years ago.

Nigeria currently has 11 power distribution companies, but many of them face challenges in remaining profitable due to a lack of capital and the imposition of sub-economic tariffs by NERC.

Kaduna Electricity Distribution Plc (Kaduna Electric) is one of the 18 successor companies that were established after the privatization of the defunct Power Holding Company of Nigeria in 2013. It operates in four northern states, selling electricity to consumers.

According to NERC, the utility owes N110 billion to various companies, including the Nigerian Bulk Electricity Trader and power generation firms. In light of this, NERC has classified the company as a ‘failing licensee’ and has the authority to dissolve its board under a law passed last year.

In July 2022, the African Export-Import Bank (Afreximbank) and local lender Fidelity Bank took control of Kaduna Electric. However, their efforts to enhance its financial performance have faced challenges.

Additionally, the Nigerian government, via its Bureau of Public Enterprises, holds a 40% stake in the company.

To address the situation, NERC has appointed an administrator and special directors to oversee Kaduna Electric temporarily and facilitate the sale of its assets to the highest bidder.