NERC Dissolves Kaduna DisCo Board Over ₦456.5 Billion Debt

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

The regulatory intervention, contained in Order No. NERC/2026/086 issued on Monday, took effect on August 10, 2026, following an inquiry and consultations with key industry stakeholders, including the Bureau of Public Enterprises (BPE).

NERC said the intervention was necessitated by what it described as KAEDC’s “grave situation”, marked by prolonged regulatory and market defaults, inadequate investment, weak operational and commercial performance, insufficient assets relative to liabilities and the absence of a credible path to sustainable recovery.

According to the Commission, KAEDC’s cumulative market obligations since privatisation stood at approximately ₦456.5bn as of May 2026.

Naija News reports that the debt comprised ₦415.5bn owed to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41bn owed to the Nigerian Independent System Operator (NISO).

The DisCo also had ₦14.26bn in non-market statutory and third-party obligations, NERC said.

The regulator added that KAEDC incurred an additional ₦118.6bn in market debt between June 2024 and May 2026, after ASI Engineering Limited took over the company’s operations.

NERC said ASI and KAEDC had “persistently failed” to provide NBET and NISO with acceptable payment bank guarantees as required by the Vesting Contract and the Market Rules of the Nigerian Electricity Supply Industry.

The Commission further stated that the core investor failed to provide a credible payment plan for the outstanding liabilities.

NERC also cited the DisCo’s poor remittance record as one of the reasons for the intervention, noting that KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately N46.71bn.

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

“This means that in the 2025 review period, KAEDC was only able to account for only 28.2 per cent of the energy received and delivered to end-use customers,” the Commission said.

NERC also faulted ASI’s capital expenditure performance, saying the investor failed to meet its capital injection commitments towards the recapitalisation of the electricity distribution company.

It said KAEDC recorded actual capital expenditure of approximately N2.48bn in 2025, against a minimum provision of ₦24.51bn, representing only 10 per cent CAPEX performance.

The regulator noted that the expenditure followed derogations and forbearances granted by NERC.

The Commission also described KAEDC’s metering performance as “abysmally low”, saying meter coverage of its end-use customers had remained between 33.26 per cent and 35.54 per cent since ASI assumed control of the company, despite interventions to support metering deployment.

NERC said its conditional no-objection issued on January 18, 2024, had approved ASI’s proposed acquisition of a 60 per cent equity stake in KAEDC, in partnership with its nominated technical partner, Akanksha Power and Infrastructure Limited.

The approval was subject to conditions, including evidence of APIL’s capacity to operate in Nigeria, a substantive technical-support proposal for KAEDC’s turnaround, a compliance plan for meeting NERC’s key performance indicators, a credible management team, an ATC&C loss-reduction trajectory and plans for providing bank guarantees in favour of NBET and the relevant market operator.

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

Consequently, NERC dissolved the existing board and removed all its directors from office.

It 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 also appointed a special director for an initial six-month period and designated administrator of the DisCo.

As administrator, Hashidu is expected to oversee KAEDC’s day-to-day operations, implement resolutions of the interim board and directives of NERC, safeguard the company’s assets and records, and handle matters requiring approval from the Commission or interim board.

NERC also withdrew the Key Yardstick Licence approvals issued to members of KAEDC’s management team and directed affected staff to present themselves for revalidation.

The Commission imposed restrictions on major financial and corporate decisions by KAEDC during the transition period.

The restrictions cover borrowing, disposal or transfer of material assets, related-party transactions, changes to senior management remuneration, appointment or removal of senior officers and alteration of the company’s capital structure.

The administrator was also directed to submit a costed 12-month stabilisation plan within 60 days.

The plan is expected to 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 said the special transition period would end upon the earlier of the completion of the transfer of KAEDC to a replacement core investor approved by the Commission or the termination, extension or variation of the intervention through a further order.