NERC dissolves Kaduna Disco’s board over N456bn debt

…appoints sole administrator

The Nigerian Electricity Regulatory Commission (NERC) has assumed direct control of Kaduna Electricity Distribution Plc (Kaduna DisCo), dissolving the utility’s board and stripping its core investor of management authority over a N456 billion debt.

NERC said in an order dated August 10 that Kaduna Electricity, known as Kaduna DisCo, is in a “grave situation” marked by prolonged default, weak commercial performance and a balance sheet where liabilities have outrun assets.

The regulator invoked its intervention powers under sections 75 to 79 of the Electricity Act 2023, the strongest tool available to it short of revoking the company’s license outright.

“The commission therefore is obliged to act in the public interest and to safeguard continuity of distribution services in KAEDC’s network area,” the order states, citing the risk that further delay could trigger an unplanned collapse of service and expose Nigeria’s electricity market to systemic risk.

Kaduna DisCo’s cumulative market debt had climbed to roughly N456.5 billion as of May, split between N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc and N41 billion owed to the system operator, according to the order.

The utility has also built up N14.26 billion in other statutory and third-party obligations, and has racked up more than N118.6 billion in additional market debt since ASI Engineering Limited took over operations in June 2024.

Kaduna DisCo paid just 41.93 percent of its adjusted market invoices in the year through December, leaving a shortfall of about N46.71 billion, the regulator’s data show.

That underperformance tracked losses across the network; aggregate technical, commercial and collection losses averaged 71.88 percent for the year, meaning the utility billed for barely more than a quarter of the power it received.

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Capital investment lagged even further behind commitments. Actual spending in 2025 came to about N2.48 billion against a required minimum of N24.51 billion, a shortfall the regulator pinned largely on the commission’s own forbearance rather than any acceleration by the investor.

Meter coverage, meanwhile, stayed below 36 percent of customers throughout the year despite repeated industry-wide pushes to close the metering gap.

NERC had conditionally cleared ASI’s plan to acquire 60 percent of Kaduna DisCo in January 2024, working alongside a technical partner, Akanksha Power and Infrastructure Limited.

That approval carried a list of conditions, proof of the partner’s operating capacity, a compliance roadmap, bank guarantees to the market operator and trading company, and management vetting, among others, that the regulator said were never fully satisfied even after ASI assumed day-to-day control.

In a letter dated August 25, 2025, ASI told the commission it had met and was sustaining the approval conditions, pointing to restructured technical teams, loss-reduction and metering projects, and efforts to arrange equity and debt financing. Regulators found the supporting evidence insufficient. “The supporting submissions… did not provide adequate evidence of compliance with the conditions,” the order says, adding that documentation for planned infrastructure and technical-advisory work was missing.

Talks came to a head after the commission warned Kaduna DisCo’s shareholders and the Africa Export-Import Bank in a formal notice that an intervention was imminent unless a credible financial rescue plan materialised.

Representatives of the investor group met regulators, the Bureau of Public Enterprises, Afrexim and Fidelity Bank at Afrexim’s offices on June 11. All parties agreed at that meeting that ASI had not met the original takeover conditions or separate requirements set by the Bureau of Public Enterprises for finalising the share sale.

ASI asked for as much as 24 months more to stabilise cash flow and reach full market remittance. The commission, working with the Bureau of Public Enterprises and Afrexim, rejected the request, concluding that a further extension of similar length was not justified given the continuing risk to customers and the market, and that ASI had failed to back the request with a credible plan.

Under the order, KAEDC’s board is dissolved and its directors removed, with a seven-member interim board of special directors, chaired by Abdullahi Garba and including a representative from the Bureau of Public Enterprises, installed for an initial six-month term.

The utility’s incumbent managing director, Abubakar Umar Hashidu, has been retained as administrator to run day-to-day operations, while background-clearance approvals for the wider management team have been withdrawn pending revalidation.

Afrexim will lead a competitive process, coordinated with the regulator, to find a replacement core investor within 12 months, with interim milestones for transaction documents, bidder shortlists and financing terms due at 60, 180 and 270 days. Prospective bidders will need to show working capital, a five-year turnaround plan and bank guarantees covering at least three months of market invoices.