The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of directors of Kaduna Electricity Distribution Plc (KAEDC) over prolonged financial and operational challenges, including accumulated market obligations of about ₦456.5 billion.
The decision is contained in Order No. NERC/2026/086, which took effect on August 10, 2026, pursuant to Sections 75 to 79 of the Electricity Act 2023.
NERC said its inquiry into KAEDC, conducted in consultation with key industry stakeholders including the Bureau of Public Enterprises (BPE), established that the electricity distribution company was in a “grave situation” characterised by prolonged regulatory and market defaults, inadequate investment, weak operational and commercial performance and insufficient assets relative to liabilities.
The Commission said KAEDC’s cumulative market obligations stood at approximately ₦456.5 billion as of May 2026.
The debt comprises about ₦415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and approximately ₦41 billion owed to the Nigerian Independent System Operator (NISO).
KAEDC also accumulated about ₦14.26 billion in other non-market statutory and third-party obligations.
NERC said since ASI Engineering Limited assumed operational control of KAEDC in June 2024, the company had accumulated additional market debt of more than ₦18.6 billion.
The Commission also said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately ₦46.71 billion.
According to NERC, the poor remittance performance was linked to KAEDC’s high Aggregate Technical, Commercial and Collection (ATC&C) losses, which stood at 71.88 per cent in 2025.
This meant the company was able to account for only about 28.2 per cent of the electricity it received and delivered to customers during the review period.
The regulator further faulted KAEDC’s capital investment, saying actual capital expenditure in 2025 was approximately ₦2.48 billion against a minimum requirement of ₦24.51 billion, representing only about 10 per cent performance.
Metering coverage also remained low, with only 34.42 per cent of KAEDC’s customers covered at the end of 2025.
NERC said the company had benefited from approximately ₦6.58 billion in regulatory derogations between January 2024 and May 2026, while Federal Government interventions since July 2018 amounted to about ₦53.79 billion.
Despite the interventions, the Commission said KAEDC’s financial and operational condition continued to deteriorate, posing risks to customers, creditors and the stability of the Nigerian Electricity Supply Industry.
The regulator said ASI had also failed to fulfil several conditions attached to its proposed acquisition of a 60 per cent majority stake in KAEDC, including commitments on capital injection, loss reduction, metering, market payment security and operational turnaround.
At a meeting involving ASI, NERC, BPE, Afreximbank and Fidelity Bank in June 2026, the parties reportedly agreed that ASI had not fulfilled the conditions required for finalisation of the shareholding arrangements.
ASI subsequently requested a further 24 months to stabilise KAEDC’s finances and improve its performance.
NERC rejected the request, saying ASI had already been in effective control of the company for more than two years without delivering the required turnaround and had failed to provide a credible plan to support the proposed extension.
Under the new order, NERC has dissolved KAEDC’s existing board and appointed an interim board of special directors to oversee the company during the transition.
The Commission has also withdrawn the Know-Your-Licensee approvals issued to KAEDC’s management team and appointed the incumbent Managing Director/Chief Executive Officer as Administrator for an initial six-month period.
NERC said the intervention is aimed at preserving KAEDC as a going concern, ensuring continuity of electricity distribution and protecting end-use customers.
The Commission will also oversee a process to secure a new, technically competent and financially capable core investor for KAEDC, with the transition expected to be completed within 12 months.
NERC said the sale of the undertaking would be based on the highest and best price offered, in accordance with the Electricity Act 2023.