By| Goodluck E.Adubazi, Abuja
The Nigerian Electricity Regulatory Commission (NERC) has taken regulatory control of Kaduna Electricity Distribution Plc (KAEDC), dissolving its board of directors and appointing an interim board of special directors over what it described as prolonged financial, operational and regulatory failures.
The intervention, contained in Order No. NERC/2026/086, takes effect from August 10, 2026, and is aimed at safeguarding electricity supply in KAEDC’s franchise area while facilitating a transparent transition to a new and financially capable core investor within 12 months.
NERC said its inquiry and consultations with key stakeholders, including the Bureau of Public Enterprises (BPE), established that KAEDC was in a “grave situation” characterised by prolonged regulatory and market defaults, inadequate investment, weak operational and commercial performance, insufficient assets relative to liabilities and the absence of a credible pathway to sustainable recovery.
According to the Commission, KAEDC’s cumulative market obligations since privatisation 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 obligations to the Nigerian Independent System Operator (NISO), in addition to about ₦14.26 billion in other non-market statutory and third-party liabilities.
NERC said that since ASI Engineering Limited assumed operational control of KAEDC in June 2024, the electricity distributor had accumulated additional market debt of more than ₦18.6 billion as of May 2026.
The regulator also accused the core investor and KAEDC of repeatedly failing to provide NBET and NISO with acceptable payment bank guarantees and a credible payment plan for the outstanding liabilities.
NERC further disclosed that KAEDC paid only 41.93 per cent of adjusted market invoices in 2025, leaving a market shortfall of approximately ₦46.71 billion.
The poor remittance performance, the Commission said, was linked to KAEDC’s extremely high Aggregate Technical, Commercial and Collection (ATC&C) losses of 71.88 per cent, meaning that the company was only able to account for about 28.2 per cent of the electricity received and delivered to end-use customers during the 2025 review period.
The Commission also faulted the distributor for inadequate investment, revealing that 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.
NERC said customer metering also remained “abysmally low”, fluctuating between 33.26 per cent and 35.54 per cent since ASI assumed control of the company.
It said substantial regulatory concessions and Federal Government interventions had also failed to reverse KAEDC’s deteriorating performance.
According to the Commission, approximately ₦6.58 billion in regulatory derogations was granted between January 2024 and May 2026, while aggregate Federal Government interventions since July 2018 amounted to approximately ₦53.79 billion.
NERC said the continued underperformance posed a material risk to electricity consumers, creditors, market stability and continuity of power supply.
The Commission said ASI had also failed to fulfil several conditions attached to its acquisition of a 60 per cent equity stake in KAEDC, despite taking effective operational control of the company in June 2024.
It said the conditions included demonstrating adequate technical capacity, presenting a credible turnaround plan, reducing ATC&C losses, improving metering, providing market payment guarantees and developing a plan for participation in the emerging decentralised electricity market.
NERC said ASI requested a further 24-month extension in June 2026 to stabilise KAEDC’s cash flow, undertake critical investments and improve its performance.
However, the Commission, BPE and other stakeholders concluded that another two-year extension was unjustifiable, given that ASI had already been in effective control for more than two years without achieving the promised turnaround.
Consequently, NERC said it had invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to intervene in KAEDC.
Under the order, the existing board of directors of KAEDC has been dissolved, with all directors removed from office.
NERC has also appointed an interim board of special directors to oversee the company during the transition period.
The order further provides for the withdrawal of the Know-Your-Licensee (KYL) approvals issued to members of KAEDC’s management team and the appointment of the incumbent Managing Director/Chief Executive Officer as Administrator for an initial six-month period.
The interim board is headed by Dr. Abdullahi Garba as Chairman, alongside other appointed special directors, including Engr. Francis U. Agoha, Major General Henry E. Ayamasaowei (rtd) and Dr. Haliru Dikko.
NERC said the intervention was not intended merely as a punitive measure but to preserve KAEDC as a going concern, protect electricity consumers and ensure continuity of distribution services.
The Commission said it would supervise a transparent process for securing a credible, technically competent and financially capable replacement core investor within 12 months.
It also directed that the Corporate Affairs Commission (CAC) and other relevant stakeholders be notified of the dissolution of the board.
The CAC, according to NERC, shall not register or give effect to any change in KAEDC’s shareholding, directorship or constitutional records during the special transition period without the Commission’s prior written approval.
NERC said the intervention would remain in force until the earlier of the completion of the transfer of the undertaking to a replacement core investor approved by the Commission or the termination, extension or variation of the intervention through another regulatory order.
The Commission warned that failure to improve the situation could ultimately lead to further regulatory action, including licence revocation and the sale of the undertaking in accordance with the Electricity Act 2023.
NERC stressed that its intervention powers were being exercised after due process had been accorded to KAEDC and its core investor, adding that the overriding objective was to protect consumers, preserve electricity supply and safeguard the stability of the Nigerian Electricity Supply Industry.
