NERC Dissolves Kaduna DisCo Board Over N456.5bn Debt The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Plc (KAEDC) over the company’s N456.5bn cumulative market obligations and prolonged financial and operational difficulties. The regulator also constituted an interim board of special directors and ordered the commencement of an open and transparent process to secure a new core investor for the electricity distribution company. The decisions were contained 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, August 10, 2026. NERC said the intervention followed an inquiry and consultations with key industry stakeholders, including the Bureau of Public Enterprises (BPE), and was triggered by KAEDC’s prolonged regulatory and market defaults, inadequate investment and weak operational and commercial performance. According to the commission, KAEDC’s cumulative market obligations stood at approximately N456.5bn as of May 2026. The debt comprises N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and N41bn due to the Nigerian Independent System Operator. The company also had other statutory and third-party obligations amounting to N14.26bn. NERC said KAEDC accumulated an additional N118.6bn in market debt between June 2024 and May 2026, after ASI Engineering Limited took over its operations. The commission described the company’s condition as “grave”, citing prolonged regulatory and market defaults, inadequate investment, weak operational and commercial performance, insufficient assets relative to liabilities and the absence of a credible recovery plan. NERC said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, leaving a market shortfall of about N46.71bn. The regulator attributed the poor remittance performance largely to the company’s high aggregate technical, commercial and collection losses, which reached 71.88 per cent in 2025. It explained that the losses meant KAEDC was able to account for only 28.2 per cent of the electricity received and supplied to end-use customers during the period under review. The commission also faulted ASI for failing to meet its capital injection commitments to recapitalise the company. KAEDC’s actual capital expenditure stood at approximately N2.48bn in 2025, against a minimum provision of N24.51bn, representing just 10 per cent performance. NERC further said the company’s meter coverage had remained between 33.26 per cent and 35.54 per cent since ASI assumed control, despite various interventions aimed at improving metering across electricity distribution companies. The regulator said KAEDC’s financial challenges persisted despite N6.58bn in regulatory derogations granted between January 2024 and May 2026, as well as about N53.79bn in Federal Government intervention funds disbursed since July 2018. NERC warned that the continued underperformance posed significant risks to customers, creditors, market stability and the continuity of electricity supply. It said KAEDC’s severe liquidity constraints had also raised concerns about its commercial viability and continued participation in the Nigerian Electricity Supply Industry. According to NERC, it had earlier notified KAEDC’s major shareholders and Afrexim Bank of the impending regulatory intervention and asked them to submit a credible plan to address the company’s financial difficulties. Representatives of ASI, NERC, BPE, Afrexim Bank and Fidelity Bank subsequently met on June 11, 2026, to consider proposals for rescuing the DisCo. NERC said the parties agreed that ASI had failed to comply with conditions attached to its acquisition of a 60 per cent majority stake in KAEDC and had also not met BPE requirements for concluding the shareholding arrangements. ASI later sought an additional 24 months to stabilise KAEDC’s cash flow, prioritise critical investments and improve its performance, including achieving full market remittance. The request was rejected by NERC, which said ASI had been in effective control of the company since June 2024 without delivering a corresponding improvement in its financial and operational performance. The commission subsequently invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve the board, preserve KAEDC as a going concern and facilitate the transition to a credible core investor within 12 months. NERC said the decision was based on the company’s financial difficulties, the risk of a disruptive cessation of electricity distribution services, ASI’s failure to fulfil takeover conditions after more than two years of effective control and the need to protect the interests of customers and other stakeholders. The regulator determined that KAEDC had persistently failed to discharge material obligations under the Electricity Act, its licence and other regulatory instruments. It also cited governance conditions detrimental to stakeholders, insufficient assets relative to liabilities and significant insolvency and receivership risks. Consequently, NERC dissolved KAEDC’s board and removed all its directors from office. The commission appointed seven special…
