The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) and initiated the search for a new core investor after the company accumulated about ₦456.5 billion in market obligations.
The intervention was contained in an order dated August 10, following what NERC described as prolonged financial, operational and regulatory failures at the distribution company.
As of May 2026, KAEDC owed ₦415.5 billion to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41 billion to the Nigerian Independent System Operator (NISO). The company also had about ₦14.26 billion in other non-market statutory and third-party obligations.
NERC said KAEDC’s financial position deteriorated further after Africa Smart Investment (ASI) assumed operational control in June 2024, with the company accumulating more than ₦118.6 billion in additional market debt by May 2026.
The commission said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a shortfall of about ₦46.71 billion. Its Aggregate Technical, Commercial and Collection (ATC&C) losses also climbed to 71.88 per cent during the year.
“This means that in the 2025 review period, KAEDC was only able to account for 28.2 per cent of the energy received and delivered to end-use customers,” NERC said.
Other performance indicators were similarly weak. KAEDC’s meter coverage stood at 34.42 per cent at the end of 2025, while billing efficiency was 61.56 per cent and collection efficiency 46.69 per cent.
The commission also said the company fell significantly short of its capital expenditure obligations, investing approximately ₦2.48 billion in 2025 against a minimum requirement of ₦24.51 billion.
NERC noted that KAEDC had benefited from substantial regulatory and government support, including approximately ₦86.58 billion in regulatory derogations between January 2024 and May 2026, as well as about ₦53.79 billion in Federal Government intervention funds since July 2018.
Despite the interventions, the regulator said KAEDC remained in a “grave situation”, characterised by prolonged 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 rejected ASI’s request for an additional 24 months to stabilise the company, saying the proposal could not be justified in view of the continuing risks to consumers and the wider electricity market.
Invoking its powers under Sections 75 to 79 of the Electricity Act 2023, the commission removed all existing directors and appointed seven special directors to form an interim board. A representative of the Bureau of Public Enterprises (BPE) is also part of the interim structure, while Dr Abdullahi Garba was appointed chairman.
The incumbent Managing Director and Chief Executive Officer, Dr Abubakar Hashidu, was appointed administrator for an initial six-month period to maintain service continuity and oversee the company’s daily operations.
NERC has meanwhile directed Afreximbank to lead an “openly competitive and transparent process” for selecting a replacement core investor, with the exercise expected to be completed within 12 months.
Prospective investors will be required to demonstrate sufficient working capital, technical expertise, transparent beneficial ownership, financial backing and a credible five-year turnaround plan.
The preferred investor must also provide cash-backed funding for the first two years of the investment programme, a Tier-1 bank performance bond for the remaining three years, one-year working capital and guarantees covering at least three months of market invoices owed to NBET and NISO.
