The Nigerian Electricity Regulatory Commission has dissolved the board of Kaduna Electricity Distribution Plc over cumulative market obligations of N456.5bn, citing prolonged financial difficulties, regulatory defaults and weak operational performance.
Under Order No. NERC/2026/086, which took effect on Monday, August 10, 2026, the regulator appointed an interim board of special directors and ordered the commencement of a transparent process to secure a new core investor for the electricity distribution company.
NERC said its intervention followed an inquiry and consultations with key stakeholders, including the Bureau of Public Enterprises. The commission said KAEDC’s accumulated market obligations since privatisation stood at about N456.5bn as of May 2026, comprising N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and N41bn payable to the Nigerian Independent System Operator.
The company also had additional non-market statutory and third-party obligations amounting to N14.26bn.
According to NERC, KAEDC accumulated more than N118.6bn in additional market debt after ASI Engineering Limited assumed operational control in June 2024.
The regulator described the company as being in a “grave situation” characterised by persistent regulatory and market defaults, inadequate investment, poor operational and commercial performance, insufficient assets relative to liabilities and the absence of a credible recovery plan.
NERC said KAEDC remitted only 41.93 per cent of its adjusted market invoices in 2025, leaving a market shortfall of approximately N46.71bn.
The poor performance was linked partly to the company’s aggregate technical, commercial and collection losses, which reached 71.88 per cent in 2025. NERC said this meant KAEDC was able to account for only 28.2 per cent of the electricity received and supplied to end users during the period.
The commission also faulted ASI for failing to meet its capital injection obligations. KAEDC recorded approximately N2.48bn in capital expenditure in 2025, against a minimum requirement of N24.51bn, translating to just 10 per cent performance.
Meter coverage also remained low, fluctuating between 33.26 per cent and 35.54 per cent since ASI assumed control of the company.
NERC noted that KAEDC’s financial challenges persisted despite receiving about N6.58bn in regulatory derogations between January 2024 and May 2026, as well as approximately N53.79bn in Federal Government interventions since July 2018.
The commission warned that the continued deterioration posed significant risks to customers, creditors, market stability and the continuity of electricity supply.
It stated, “The analysis confirms that KAEDC is experiencing severe liquidity constraints and that its commercial viability and continued participation in the market pose a systemic risk to NESI.”
NERC said it had previously informed KAEDC’s major shareholders and Afrexim Bank about the impending intervention and requested a credible plan to resolve the company’s financial difficulties.
Representatives of ASI, NERC, BPE, Afrexim Bank and Fidelity Bank subsequently met on June 11, 2026, to consider possible measures to rescue the company.
According to NERC, the parties agreed that ASI had failed to meet conditions attached to its acquisition of a 60 per cent majority stake in KAEDC and had also not satisfied BPE requirements for finalising the shareholding structure.
ASI later requested an additional 24 months to stabilise the company’s finances, undertake critical investments and improve its market remittance performance.
However, NERC rejected the request, arguing that ASI had already been in effective control of KAEDC for more than two years without delivering significant financial or operational improvements.
The commission subsequently invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve the board, preserve the company as a going concern and facilitate its transition to a new core investor.
NERC ordered that the existing board be dissolved and all directors removed from office.
“KAEDC’s board of directors is HEREBY DISSOLVED. All directors of KAEDC are removed from office, and the existing board stands dissolved pursuant to section 75 of the EA,” the order stated.
Seven special directors were appointed to oversee the transition, with Dr Abdullahi Garba as chairman. Other members include Engr Francis Agoha, Mr Aliyy Aliyu, retired Major General Henry Ayamasaowei, Dr Haliru Dikko, Mr Ayodeji Gbeleyi representing the BPE, and Dr Abubakar Umar Hashidu.
NERC also appointed the incumbent Managing Director/Chief Executive Officer, Dr Abubakar Umar Hashidu, as administrator for an initial six-month period, subject to review.
“The incumbent Managing Director/Chief Executive Officer, Dr Abubakar Umar Hashidu, is hereby appointed as Administrator for an initial term of six months subject to review of the Commission,” the order stated.
The administrator will oversee the company’s daily operations, ensure continuity of electricity services, implement interim board decisions, comply with regulatory directives and protect KAEDC’s assets and records.
The regulator further withdrew the Know-Your-Licensee approvals previously issued to members of KAEDC’s management team and directed affected officials to undergo revalidation.
Meanwhile, Afrexim Bank has been directed to coordinate an open, competitive and transparent process for selecting a replacement core investor.
NERC said the preferred investor must be presented to the commission for approval, with the process expected to be completed within 12 months, unless a written extension is granted.
The intervention marks a major regulatory step aimed at preventing further deterioration of KAEDC and protecting electricity consumers and the wider Nigerian Electricity Supply Industry.
