By Abiodun Folarin
WorldStage– The Nigerian Electricity Regulatory Commission (NERC), has dissolved the board of directors of Kaduna Electricity Distribution Plc (KAEDC), removed all its directors and appointed the company’s Managing Director/Chief Executive Officer, Dr. Abubakar Umar Hashidu, as Administrator for an initial six-month period.
The sweeping regulatory intervention, contained in an order on Monday, also sets in motion a transparent process for identifying and transferring the Kaduna electricity distribution company to a new core investor within 12 months.
The Commission said the intervention became necessary after finding KAEDC 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 order, issued pursuant to Sections 75–79 of the Electricity Act 2023, provides for the dissolution of KAEDC’s existing board and the appointment of a seven-member interim board of special directors to oversee the company during the transition.
The special board is chaired by Dr. Abdullahi Garba, while other members include Engr. Francis U. Agoha, Mr. Aliyu E. Aliyu, Major General Henry E. Ayamasaowie (rtd), Dr. Haliru Dikko, Mr. Ayodeji A. Gbeleyi, representing the Bureau of Public Enterprises (BPE), and Dr. Abubakar Umar Hashidu for an initial six-month term.
₦456.5bn market obligations
A major concern highlighted by NERC is the scale of KAEDC’s financial obligations.
According to the Commission, the distributor’s cumulative market obligation since privatisation stood at approximately ₦456.5 billion as of May 2026.
The amount comprises about ₦415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41 billion owed to the Nigerian Independent System Operator (NISO).
KAEDC had also accumulated ₦14.26 billion in other non-market statutory and third-party obligations, the Commission said.
The regulator further disclosed that since ASI Engineering Limited (ASI) assumed operational control of KAEDC in June 2024, the distributor accumulated additional market debt in excess of ₦118 billion as of May 2026.
NERC said the core investor and KAEDC had also repeatedly failed to furnish NBET and NISO with acceptable or credible payment bank guarantees required under applicable market rules.
Regulatory concessions fail to reverse decline
The Commission’s order reveals that significant regulatory concessions and government interventions had previously been deployed to support KAEDC.
NERC said approximately ₦6.58 billion in regulatory derogations was granted between January 2024 and May 2026, while aggregate Federal Government intervention disbursements since July 2018 amounted to approximately ₦53.79 billion.
Despite these interventions, the Commission said KAEDC’s financial and operational condition continued to deteriorate, posing material risks to consumers, creditors, market stability and continuity of electricity supply.
NERC also found that the company was experiencing severe liquidity constraints, with its continued participation in the electricity market posing a systemic risk to NBET.
Performance indicators remain weak
The regulatory order presents a particularly troubling picture of KAEDC’s operational performance.
For 2025, the company recorded an average metering rate of 34.42 per cent, while billing efficiency stood at 61.56 per cent and collection efficiency at only 46.69 per cent.
The distributor’s average Aggregate Technical, Commercial and Collection (ATC&C) losses stood at 71.88 per cent in 2025.
NERC said persistent market shortfalls, high ATC&C losses, low metering coverage, weak collections and inadequate capital expenditure demonstrated that the promised turnaround had not been achieved.
ASI failed takeover conditions
The Commission said its conditional No-Objection of January 18, 2024 had approved the proposed acquisition of 60 per cent equity in KAEDC by ASI, working with Akanksha Power and Infrastructure Limited (APIL) as its nominated technical partner.
However, the approval was subject to several conditions, including demonstration of technical capacity, provision of technical support, a credible management team, an ATC&C loss-reduction trajectory, bank guarantees, a plan for bilateral electricity trading and a strategy for operating in the decentralised electricity market.
NERC said ASI subsequently failed to demonstrate full compliance with the conditions, while its supporting submissions did not provide adequate evidence of planned infrastructure investment or the technical and advisory arrangements required for the proposed turnaround.
The Commission said ASI had been in effective control of KAEDC for more than two years without delivering the required financial and operational improvement.
ASI sought another 24 months
The order further reveals that ASI requested an extension of up to 24 months to stabilise KAEDC’s cash flow, prioritise critical investments and deliver measurable improvements, including a pathway to full market remittance.
NERC, BPE and the Africa Export-Import Bank (Afreximbank), however, rejected the case for another lengthy extension, citing the continuing risks to consumers and the electricity market.
The Commission said further delay could lead to an unplanned and disruptive cessation of distribution services and expose the electricity market to systemic risks.
Afreximbank to lead search for replacement investor
Under the new order, Afreximbank will coordinate an open, competitive and transparent process to identify a replacement core investor for KAEDC and present the preferred investor to NERC for approval.
The process is expected to be completed within 12 months, unless the Commission grants a written extension for demonstrated cause.
Afreximbank is required to submit the transaction structure, governance protocol and timetable within 60 days; bid documents, data-room protocol and investor qualification criteria within 180 days; evidence of market engagement and a qualified bidder shortlist within 270 days; and an evaluation report, preferred bidder shortlist and executed transaction documents within 12 months.
NERC has also stipulated stringent qualification requirements for prospective investors, including adequate working capital, transparent beneficial ownership, technical capacity to turn around a failing utility, credible backing from leading financial institutions and a five-year business plan covering service delivery, metering, network investment, loss reduction, market remittance, legacy liabilities and acquisition debt.
New investor must provide substantial financial backing
The preferred investor will be required to provide cash-backed funding for the first two years of an approved five-year PIP/CAPEX programme, a Tier-1 bank performance bond for the remaining three years, cash-backed one-year working capital excluding energy costs and Tier-1 bank guarantees to NBET and NISO covering at least three months of market invoices.
NERC has also ordered the Administrator, BPE, NBET, NISO and other material creditors to reconcile KAEDC’s liabilities and submit a liability-management plan to the Commission within 90 days.
Six-month Administrator, 12-month stabilisation plan
Dr. Hashidu, as Administrator, will remain responsible for the day-to-day operation of the company, implementation of interim-board resolutions and NERC directives, safeguarding of assets and records and processing matters requiring regulatory approval.
He must also submit a costed 12-month stabilisation plan within 60 days of the commencement of the order.
The plan is expected to cover cash-flow controls, market remittance, collections, metering, energy accounting, loss reduction, service reliability, safety, customer complaints, capital expenditure, procurement, staff obligations and legacy liabilities, with monthly milestones and measurable outcomes.
NERC has meanwhile withdrawn the Know-Your-Licensee (KYL) approvals previously issued to members of KAEDC’s management team and directed affected officials to present themselves for KYL revalidation.
The Commission has also restricted KAEDC from undertaking material borrowing or guarantees, disposing of or encumbering material assets, altering senior management remuneration, changing its capital structure or entering certain transactions without prior written approval.
The order takes effect immediately and will remain in force until amended or revoked by NERC.
WorldStage News learnt that the intervention represents one of the most extensive regulatory actions against a Nigerian electricity distribution company since the sector’s privatisation, with the regulator now seeking not merely a management adjustment but a full transition to a replacement core investor after the failure of the existing turnaround arrangement.
