NERC dissolves Kaduna DisCo board over N456bn debt and defaults

NERC dissolves Kaduna DisCo board over N456 bn debt and defaults

The Nigerian Electricity Regulatory Commission (NERC) issued Order No. NERC/2026/086 on Monday, formally dissolving the board of Kaduna Electricity Distribution Plc (KAEDC) and appointing a seven‑member interim board. The order, signed by Chairman Dr Musiliu Oseni and Commissioner Dafe Akpeneye, cites “prolonged financial and regulatory defaults” amounting to roughly N456.5 billion as of May 2026.

KAEDC’s financial picture has deteriorated despite a change of core investor in June 2024. Africa Export‑Import Bank (Afreximbank), acting on NERC’s direction, will lead an open, competitive process to locate a new core investor within the next twelve months. The incoming investor will be required to demonstrate adequate working capital, technical capacity and a five‑year business plan covering metering, network investment, loss reduction, market remittances and legacy liabilities.

Media additions

"The commission, following its inquiry and consultation undertaken with key industry stakeholders including the Bureau of Public Enterprises (BPE), finds that Kaduna Electricity Distribution Plc (KAEDC or the Licensee) 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."

Order NERC/2026/086, NERC

Chronology of regulatory actions

• January 2024 – NERC approved ASI Engineering Limited’s acquisition of 60 % of KAEDC, attaching conditions such as a loss‑reduction plan, technical support, competent management, bilateral trading and payment guarantees.
• June 2024 – ASI took operational control of KAEDC following the acquisition.
• 2025 – The DisCo recorded an Aggregate Technical, Commercial & Collection (ATC&C) loss of 71.88 %, meaning it could account for only about 28.2 % of the energy it received.
• 2025 – Capital expenditure fell to N2.48 billion, roughly 10 % of the regulator’s minimum requirement of N24.51 billion.
• 2025 – Market remittance performance hit 41.93 % of adjusted invoices (N33.73 billion paid against N80.44 billion invoiced), leaving a shortfall of N46.71 billion.
• May 2026 – Cumulative market obligations rose to about N456.5 billion, comprising N415.5 billion owed to NBET, N41 billion to NISO and N14.26 billion of other statutory and third‑party debts.
• May 2026 – ASI’s tenure added an extra N118.6 billion of market debt.

Interim board composition

The interim board consists of seven special directors. Dr Abdullahi Garba chairs the board. The other members are Mr Francis Agoha, Mr Aliyu Aliyu, Maj. Gen. Henry Ayamasaowei (rtd), Dr Haliru Dikko, Dr Ayodeji Gbeleyi (representing the BPE) and Dr Abubakar Hashidu, who also assumes the role of administrator for an initial six‑month period while continuing as managing director.

Hashidu’s dual role is designed to maintain day‑to‑day operations while the interim board implements NERC’s directives. The commission also directed the Administrator, the BPE, NBET, NISO and other material creditors to reconcile KAEDC’s liabilities and file a liability management plan within ninety days of the order’s commencement.

Key performance shortfalls

• Debt profile: N415.5 billion owed to NBET, N41 billion to NISO, plus N14.26 billion in other obligations.
• Metering coverage: Between 33.26 % and 35.54 % of customers were metered after ASI’s takeover; 2025’s average metering rate was 34.42 %.
• Capital spending: N2.48 billion expended in 2025 against a required N24.51 billion.
• Market remittance: Collected N51.39 billion in 2025 against adjusted invoices of N80.44 billion but remitted only N33.73 billion.
• Losses: ATC&C losses of 71.88 % left the DisCo able to account for just 28.2 % of the energy received.
• Regulatory support: Approximately N6.58 billion in regulatory derogations were granted between January 2024 and May 2026, while federal government interventions since July 2018 totalled about N53.79 billion.

Why the board was dissolved

NERC’s order stresses that KAEDC “remains in a grave situation” marked by “prolonged regulatory and market default” and “inadequate investment.” The regulator notes that ASI and KAEDC repeatedly