Nigeria: NERC Dissolves Kaduna Power Distributor’s Board Over ₦456.5 Billion Naira Debt

Nigeria’s electricity regulator on Monday dissolved the board of Kaduna Electricity Distribution Plc (KAEDC) over cumulative market obligations of 456.5 billion naira (equivalent of $335,230,402.04) and prolonged financial, operational and regulatory failures.

The Nigerian Electricity Regulatory Commission (NERC) said it exercised its powers under Sections 75 to 79 of the Electricity Act 2023.

KAEDC’s cumulative market obligations since its privatisation stood at about 456.5 billion naira as of May 2026, comprising 415.5 billion naira owed to Nigerian Bulk Electricity Trading Plc (NBET) and 41 billion naira owed to the Nigerian Independent System Operator (NISO), NERC said.

The company also had 14.26 billion naira in other non-market statutory and third-party obligations, the regulator said in Order No. NERC/2026/086, titled “Order on the Regulatory Intervention in Kaduna Electricity Distribution Plc Pursuant to the Electricity Act 2023“, which took effect on Monday, Aug. 10.

NERC said KAEDC’s financial position deteriorated after ASI Engineering Limited took over its operations in June 2024, with the company accumulating more than 118.6 billion naira in additional market debt between then and May 2026.

The regulator said the deterioration occurred despite government and regulatory interventions aimed at improving the company’s financial and operational performance.

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

The commission faulted KAEDC’s core investors for failing to provide NBET and NISO with acceptable payment bank guarantees as required under their vesting contract and the market rules governing Nigeria’s electricity supply industry.

It also said the core investor had failed to present a credible plan for settling the liabilities.

KAEDC paid 41.93% of its adjusted market invoices in 2025, resulting in a market shortfall of about 46.71 billion naira, NERC said.

The regulator attributed the poor remittance performance largely to KAEDC’s high aggregate technical, commercial and collection losses, which stood at 71.88% in 2025.

The losses meant the company could account for only about 28.2% of the electricity it received for delivery to end-use customers during the year, NERC said.

The regulator also said KAEDC failed to meet its capital investment commitments. Its actual capital expenditure in 2025 was about 2.48 billion naira, compared with a minimum requirement of 24.51 billion naira, representing about 10% of the prescribed investment level.

Meter coverage remained between 33.26% and 35.54% since ASI took over the company, despite interventions aimed at increasing metering across Nigeria’s electricity distribution companies, NERC said.

The regulator said KAEDC had received about 6.58 billion naira in regulatory derogations between January 2024 and May 2026, as well as about 53.79 billion naira in federal government interventions since July 2018.

Despite the support, the company failed to demonstrate a sustainable turnaround, NERC said.

“The continued underperformance therefore poses material risk to end-use customers, creditors, market stability and continuity of electricity service,” the commission said.

NERC said its analysis showed that KAEDC was facing severe liquidity constraints and that its commercial viability and continued participation in the electricity market posed a systemic risk to the Nigerian Electricity Supply Industry.

The regulator had previously notified KAEDC’s major shareholders and Afreximbank of the impending intervention and asked them to submit a credible recovery plan.

Representatives of ASI Engineering, NERC, the Bureau of Public Enterprises (BPE), Afreximbank and Fidelity Bank met on June 11 to discuss proposals to rescue the utility, NERC said.

The regulator said the meeting established that ASI had not complied with conditions attached to its acquisition of a 60% majority stake in KAEDC and had failed to meet BPE requirements for finalising the shareholding arrangements.

ASI subsequently requested an extension of up to 24 months to stabilise KAEDC’s cash flow, prioritise critical investments and improve market remittances.

NERC said the request was rejected after the commission, BPE and Afreximbank determined that a further extension was not justified given ASI’s lack of progress since taking effective control of the company in June 2024.

“The commission, BPE and Afrexim considered this request against the backdrop of ASI being in effective control of KAEDC since June 2024 without a corresponding improvement in the utility’s financial and operational performance, and determined that a further extension of comparable duration was not justifiable in view of the continuing risk to end-use customers and the market,” NERC said.