N456.5BN DEBTS: NERC Takes Over Kaduna DisCo For Second Time In 30 Months

| Regulator dissolves company’s board, appoints interim administrator

BY NSE ANTHONY-UKO, Abuja AND CHIKA IZUORA, Lagos

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Plc (KAEDCO) and appointed an interim administrator for the second time in 30 months over the DisCo’s failure to meet its market obligations, rising debt and continued operational underperformance.

The intervention, which took effect on Monday, August 10, 2026, followed KAEDCO’s cumulative market obligations of N456.5 billion as of May 31, 2026.

Recall that NERC dissolved KAEDCO’s board in January 2024 after issuing Order No. NERC/2024/001, removing the existing directors, appointing an administrator and special directors, and placing the company under direct regulatory supervision.

In the latest intervention, the Commission appointed KAEDCO’s managing director and chief executive officer, Dr Abubakar Umar Hashidu, as administrator and chairman of the interim board for an initial six-month period, subject to review. The Bureau of Public Enterprises is represented on the board by Ayodeji A. Gbeleyi.

NERC said the intervention was necessary to preserve KAEDCO as a going concern, maintain electricity distribution in its franchise area and protect customers while a new core investor is sought.

According to the order, KAEDCO’s N456.5 billion market obligations comprised N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc, N41 billion owed to the Nigerian Independent System Operator and N14.26 billion in other statutory and third-party obligations.

NERC also said KAEDCO accumulated more than N118.6 billion in additional market debt under ASI Engineering Limited as of May 2026.

The Commission said the DisCo remitted only 41.93 per cent of its adjusted market invoices in 2025, while its Aggregate Technical, Commercial and Collection losses stood at 71.88 per cent.

Its investment performance was also poor, with only N2.48 billion invested against a required capital investment of N24.51 billion. Customer metering coverage remained below 36 per cent.

The latest intervention followed a series of regulatory warnings dating back to 2023.

In May 2023, NERC notified KAEDCO of its intention to cancel the company’s licence over its failure to meet market obligations and comply with the terms of its distribution licence. At the time, the Commission cited a debt of about N51 billion and gave the company time to address the breaches.

NERC subsequently dissolved the board in January 2024, saying the action followed the company’s persistent failure to meet its market obligations, secure adequate financing and present a credible plan to restore financial and operational viability.

The intervention was intended to stabilise the company and facilitate the entry of a new core investor. NERC also introduced a performance-monitoring framework covering revenue collection, losses, metering, connections, network reliability and customer service.

In July 2024, ASI Engineering Limited emerged as a new investor after acquiring a 60 per cent equity stake in Kaduna Electric. The transaction was expected to inject fresh capital and improve the DisCo’s performance, but its subsequent debt accumulation and operational deficiencies led to the renewed intervention.

Under the latest order, NERC is seeking a technically competent and financially capable replacement core investor through a transparent and competitive process.

Afreximbank is expected to coordinate the process, which is to be completed within 12 months.

NERC has also restricted changes to the company’s ownership and governance structure during the transition.

The Corporate Affairs Commission has been notified not to register changes in KAEDCO’s shareholding, directorship or constitutional records without the Commission’s prior written approval.

Consumer Groups Laud NERC’s Intervention

Reacting to the dissolution, executive director of Peering Advocacy and Advancement Centre in Africa (PAACA), Jamila Umar, said the intervention must be based on a proper review of the utility firm’s performance.

Umar, who is also the NESI Consumer Advocacy Coordinator, said the electricity value chain must be properly structured to perform optimally.

She called for stronger gas-to-power coordination, improved grid infrastructure, measures to address market liquidity gaps, diversification of energy sources and structured engagement among regulators, operators, civil society and the National Assembly.

She said electricity reform must remain technically sound and citizen-centred, stressing that consumers must not become the shock absorbers for systemic inefficiencies across the electricity value chain.

Umar also said tariff integrity must align with service delivery, adding that Band A’s improved liquidity must translate into measurable performance and value for money.

Also speaking, executive director and convener of PowerUp Nigeria, Adetayo Adegbemle, applauded NERC’s intervention, saying delayed action could further worsen services by the DisCo.

Adegbemle said consumers heaved a sigh of relief when a core investor emerged, but the investor failed to deploy resources to critical infrastructure, to the point that the DisCo was almost cut off from the grid network.

He said Kano, Ibadan and Port Harcourt DisCos had demonstrated resilience after regulatory action, but Kaduna DisCo failed to address consumers’ needs.

He recalled that consumers had persistently complained about poor service delivery, high unmetered billing and inadequate electricity supply.

Other DisCos and Investor Disputes

KAEDCO is not the only DisCo to have experienced difficulties with its original investors. Several others have faced lender intervention, government restructuring or changes in ownership after core investors defaulted on acquisition loans or failed to meet performance expectations.

Kano, Benin And Kaduna

Fidelity Bank and Afreximbank financed the acquisition of stakes in Kano, Benin and Kaduna DisCos. After the core investors defaulted on the financing arrangements, Fidelity Bank activated its rights over the collateralised shares and began moves to take control of the boards of the three companies.

The federal government described the action as a contractual and commercial intervention arising from agreements between the core investors and lenders. It was different from NERC’s statutory regulatory takeover of KAEDCO, although it had major implications for the ownership and governance of the affected DisCos.

Ibadan DisCo

Ibadan Electricity Distribution Company was also affected by disputes involving lenders and its original core investors. The company was among the DisCos linked to defaults on acquisition loans obtained during the 2013 privatisation exercise.

The federal government and the Bureau of Public Enterprises subsequently became involved in restructuring efforts aimed at preventing the company from collapsing under its debt burden, with lenders and government representatives involved in changes to its board and management.

Port Harcourt DisCo

Port Harcourt Electricity Distribution Company was another DisCo affected by investor and lender difficulties. It was included in the 2022 government-backed takeover and restructuring process involving DisCos whose original investors had failed to meet their financial obligations.

The intervention was intended to keep the company operating, protect consumers and create a pathway for new ownership or recapitalisation.

Abuja DisCo

Abuja Electricity Distribution Company was also affected by lender action involving its ownership stake acquired during the privatisation process. Reports linked the company to a takeover by financial institutions after the relevant investor defaulted on financing obligations.

Unlike KAEDCO, the Abuja case was primarily associated with lenders’ enforcement over pledged shares rather than a direct NERC dissolution of the DisCo’s board under Sections 75 to 79 of the Electricity Act.

Yola DisCo

Yola Electricity Distribution Company has also experienced ownership and financial restructuring challenges. It was among the DisCos affected by government or lender interventions aimed at preventing financially distressed utilities from collapsing.

The federal government previously took over Yola DisCo after the original private investor was unable to continue operating the company effectively and subsequently pursued a new ownership and management arrangement.