NERC Dissolves State Disco Board Over N456bn Debt

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Plc (KAEDC) over accumulated market debts of about ₦456.5 billion and prolonged financial and operational difficulties.

The regulator also appointed an interim board and ordered the search for a new core investor for the electricity distribution company.

The decisions were contained in Order No. NERC/2026/086, which took effect on Monday, August 10, 2026.

NERC said the intervention followed an inquiry and consultations with major industry stakeholders, including the Bureau of Public Enterprises (BPE). It said the action became necessary due to KAEDC’s prolonged defaults, inadequate investment, and poor operational and commercial performance.

According to the commission, KAEDC’s total market obligations since the power sector privatisation stood at about ₦456.5 billion as of May 2026. Of this amount, approximately ₦415.5 billion was owed to the Nigerian Bulk Electricity Trading Plc, while ₦41 billion was due to the Nigerian Independent System Operator.

The company also had about ₦14.26 billion in other statutory and third-party obligations.

NERC said the financial situation worsened after ASI Engineering Limited assumed control of KAEDC in June 2024. The company accumulated an additional market debt of more than ₦118.6 billion between then and May 2026.

The regulator said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, leaving a shortfall of about ₦46.71 billion.

It attributed the weak payment performance partly to the company’s high technical, commercial and collection losses, which reached 71.88 per cent in 2025. This meant the company was effectively accounting for only about 28.2 per cent of the electricity it received and supplied to customers.

The commission also said ASI Engineering failed to meet its capital investment obligations. KAEDC spent about ₦2.48 billion on capital expenditure in 2025, compared with the minimum requirement of ₦24.51 billion, representing only about 10 per cent of the expected investment.

Meter coverage also remained low, ranging between 33.26 per cent and 35.54 per cent since ASI took over the company, according to NERC.

The regulator said KAEDC’s problems persisted despite about ₦6.58 billion in regulatory concessions granted between January 2024 and May 2026, as well as approximately ₦53.79 billion in Federal Government intervention funds provided since July 2018.

NERC said the continued poor performance posed risks to customers, creditors and the stability of Nigeria’s electricity market.

The commission had earlier notified KAEDC’s major shareholders and Afrexim Bank about the proposed intervention and asked them to submit a plan for addressing the company’s financial problems.

Representatives of ASI, NERC, BPE, Afrexim Bank and Fidelity Bank later met on June 11 to discuss possible measures to rescue the company.

NERC said the parties agreed that ASI had not fulfilled conditions attached to its acquisition of a 60 per cent majority stake in KAEDC and had also failed to meet requirements set by the BPE for completing the shareholding arrangements.

ASI subsequently sought an additional 24 months to stabilise the company’s finances, increase investment and improve market remittances.

However, NERC rejected the request, arguing that ASI had already been in effective control of KAEDC for more than two years without producing the required financial and operational improvements.

The regulator therefore invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve the existing board and put an interim management structure in place.

NERC said the intervention was also intended to preserve KAEDC as a going concern and ensure a smooth transition to a credible investor.

As part of the order, all members of KAEDC’s existing board were removed from office.

Seven special directors were appointed to oversee the company during the transition period, with Dr Abdullahi Garba named as chairman.

Other members of the interim board are Engr Francis Agoha, Aliyy Aliyu, retired Major General Henry Ayamasaowei, Dr Haliru Dikko, Ayodeji Gbeleyi, representing the BPE, and Dr Abubakar Umar Hashidu.

NERC also appointed Hashidu, the company’s current Managing Director and Chief Executive Officer, as administrator for an initial six-month period.

The administrator is expected to oversee daily operations, implement decisions of the interim board, comply with regulatory directives and protect KAEDC’s assets and records while ensuring uninterrupted electricity distribution.

The commission also withdrew the Know-Your-Licensee approvals previously issued to KAEDC’s management team and ordered affected officials to undergo revalidation.

Meanwhile, Afrexim Bank was directed to coordinate an open and competitive process for the selection of a replacement core investor.

The preferred investor must be submitted to NERC for approval, with the selection process expected to be completed within 12 months from the effective date of the regulatory order, unless the commission grants a written extension.