NERC Dissolves Kaduna Electric Board over N456.5bn Market Debt

The Nigerian Electricity Regulatory Commission has dissolved the board of Kaduna Electricity Distribution Plc over N456.5bn in cumulative market obligations, citing prolonged financial defaults, inadequate investment and weak operational performance.

The decision, contained in Order No. NERC/2026/086, took effect on Monday, August 10, 2026, with the regulator appointing an interim board and directing the commencement of a fresh process to secure a new core investor for the distribution company.

NERC said the N456.5bn obligation comprised N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and N41bn due to the Nigerian Independent System Operator as of May 2026.

The company also had N14.26bn in other statutory and third-party obligations.

According to the regulator, Kaduna Electric accumulated more than N118.6bn in additional market debt between June 2024, when ASI Engineering Limited took over operations, and May 2026.

NERC said the company paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately N46.71bn.

It attributed the poor remittance performance to high aggregate technical, commercial and collection losses, which reached 71.88 per cent in 2025.

The regulator said Kaduna Electric’s capital investment also remained significantly below requirements.

The company spent approximately N2.48bn on capital expenditure in 2025, against a minimum provision of N24.51bn, representing only 10 per cent performance.

Meter coverage also remained between 33.26 per cent and 35.54 per cent since ASI assumed control, NERC said.

NERC Rejects Further Extension

The regulator said Kaduna Electric’s financial difficulties persisted despite about N6.58bn in regulatory derogations granted between January 2024 and May 2026 and approximately N53.79bn in Federal Government intervention disbursements since July 2018.

NERC said ASI had requested an additional 24 months to stabilise the company’s cash flow, prioritise critical investments and improve market remittances.

However, the commission rejected the request, saying ASI had been in effective control for more than two years without a corresponding improvement in the company’s financial and operational performance.

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

The regulator said the company’s insufficient assets relative to its liabilities also created material insolvency and receivership risks.

Consequently, it dissolved the existing board and removed all its directors from office.

The Interim Board Appointed

NERC appointed seven special directors to oversee the company during the transition.

Dr Abdullahi Garba was appointed chairman, alongside Engr Francis Agoha, Mr Aliyy Aliyu, retired Major General Henry Ayamasaowei, Dr Haliru Dikko, Mr Ayodeji Gbeleyi, representing the Bureau of Public Enterprises, and Dr Abubakar Umar Hashidu.

Hashidu, the incumbent managing director and chief executive officer, was also appointed administrator for an initial six-month term.

The administrator is expected to oversee day-to-day operations, implement interim board resolutions, comply with regulatory directives and safeguard the company’s assets and records.

NERC also withdrew the Know-Your-Licensee approvals issued to members of the company’s management team and directed affected executives to present themselves for revalidation.

Afreximbank To Lead Investor Search

The commission directed Afreximbank to coordinate an open, competitive and transparent process for selecting a replacement core investor for Kaduna Electric.

The preferred investor is expected to be presented to NERC for approval, with the process to be completed within 12 months of the commencement of the order, unless the commission grants a written extension.

NERC said the intervention was necessary to preserve Kaduna Electric as a going concern, ensure continuity of electricity distribution services and facilitate a transition to a credible new core investor.

The regulator said Kaduna Electric had “persistently demonstrated its inability to discharge material obligations” under the Electricity Act, its licence and other regulatory instruments.

The intervention places Kaduna Electric among Nigeria’s electricity distribution companies facing significant financial and operational pressure, while putting the search for a new investor at the centre of efforts to stabilise the company.