The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) Plc over the company’s N456.5bn cumulative market obligations and prolonged financial and operational challenges.
The regulator also appointed an interim board of special directors and directed the commencement of a transparent process for the selection of 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, and was necessitated by KAEDC’s prolonged regulatory and market defaults, inadequate investment and weak operational and commercial performance.
The commission said KAEDC’s cumulative market obligation since privatisation stood at approximately N456.5bn as of May 2026, comprising N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and N41bn due to the Nigerian Independent System Operator.
The company also had other non-market statutory and third-party obligations of N14.26bn, according to the regulator.
NERC said that since ASI Engineering Limited took over operations of KAEDC in June 2024, the company had accrued additional market debt of more than N118.6bn as of May 2026.
“The commission, following its inquiry and consultation undertaken with key industry stakeholders including the Bureau of Public Enterprises, finds that Kaduna Electricity Distribution Plc 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,” the commission stated.
NERC said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately N46.71bn during the year.
It linked the poor remittance performance to the company’s high aggregate technical, commercial and collection losses, which stood at 71.88 per cent in 2025. The regulator explained that the losses meant KAEDC could account for only 28.2 per cent of the electricity received and delivered to end-use customers during the review period.
NERC also said ASI failed to meet its capital injection commitments towards recapitalising the utility.
According to the commission, KAEDC’s actual capital expenditure in 2025 was approximately N2.48bn, against a minimum capital expenditure provision of N24.51bn, representing only 10 per cent performance.
The regulator further noted that KAEDC’s meter coverage had remained between 33.26 per cent and 35.54 per cent since ASI took over the company, despite several interventions aimed at supporting meter deployment across electricity distribution companies.
NERC said the company’s financial difficulties persisted despite approximately N6.58bn in regulatory derogations granted between January 2024 and May 2026 and aggregate Federal Government intervention disbursements of approximately N53.79bn since July 2018.
“The continued underperformance therefore poses material risk to end-use customers, creditors, market stability and continuity of electricity service,” the commission stated.
It added, “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 notified KAEDC’s major shareholders and Afrexim Bank of the imminent regulatory intervention and required them to present a credible plan to address the company’s financial situation.
It said representatives of ASI, NERC, BPE, Afrexim and Fidelity Bank met on June 11, 2026, to discuss proposals for rescuing KAEDC.
According to the commission, all parties at the meeting agreed that ASI had not complied with conditions prescribed for its acquisition of a 60 per cent majority shareholding in KAEDC and had also failed to comply with BPE requirements for finalising the shareholding arrangements.
NERC said ASI subsequently requested an extension of up to 24 months to stabilise KAEDC’s cash flow, prioritise critical investments and deliver measurable performance improvements, including a pathway to full market remittance.
However, the regulator rejected the request, saying ASI had been in effective control of KAEDC since June 2024 without a corresponding improvement in the company’s financial and operational performance.
“The commission, BPE and Afrexim considered this request against the backdrop of ASI being in effective control of KAEDC since June 2024 without a corresponding improvement in the utility’s financial and operational performance, and determined that a further extension of comparable duration was not justifiable in view of the continuing risk to end-use customers and the market,” NERC stated.
The commission said it subsequently resolved to exercise its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve KAEDC’s board and preserve the company as a going concern while achieving a transparent transition to a credible core investor within 12 months.
NERC listed the critical nature of KAEDC’s financial difficulties, the risk of further delay leading to disruptive cessation of distribution services, ASI’s failure to fulfil takeover conditions after more than 24 months of effective control, and the need for the regulator to act with certainty while protecting the interests of stakeholders.
In its determination, NERC said KAEDC had “persistently demonstrated its inability to discharge material obligations”, remained in prolonged default of obligations under the Electricity Act, its licence and regulatory instruments, and had experienced governance conditions detrimental to stakeholders and the undertaking.
The regulator also said the company had insufficient assets relative to liabilities, with material insolvency and receivership risks.
Consequently, NERC ordered the dissolution of KAEDC’s board and removal of all its directors 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.
The commission appointed seven special directors to constitute the interim board for the transition period, with Dr Abdullahi Garba as chairman.
Other members are 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 term.
“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 commission said the administrator would serve as chief executive of the undertaking to ensure continuity of service, manage day-to-day operations, implement interim board resolutions, comply with NERC directives and safeguard the company’s assets and records.
NERC also withdrew the Know-Your-Licensee approvals issued to all members of KAEDC’s management team and directed affected management staff to present themselves for revalidation.
Meanwhile, NERC directed Afrexim Bank to coordinate an open, competitive and transparent process for securing a replacement core investor for KAEDC.
The preferred investor is to be presented to NERC for approval, with the process to be completed within 12 months from the commencement of the Order unless the Commission grants a written extension.
