The Nigerian Electricity Regulatory Commission (NERC) has dissolved the Board of Directors of Kaduna Electricity Distribution Company (KAEDCO) over the company’s mounting liabilities, with its cumulative market obligations reaching approximately N456.5bb as of May 2026.
The Commission also appointed an interim board to oversee the affairs of the electricity distribution company for six months, citing severe liquidity constraints, persistent failure to meet market obligations and poor operational performance.
NewsNGR recalled that KAEDCO was among six electricity distribution companies taken over by creditors following financial difficulties that affected their ability to repay loans used to acquire the utilities.
The latest intervention came barely two years after ASI Engineering Limited took over the management and operations of KAEDCO in June 2024.
In an order signed by NERC Chairman, Musiliu O. Oseni, and Commissioner for Legal, Licensing and Compliance, Dafe Akpeneye, the Commission said the company’s cumulative market obligation since privatisation comprised approximately N415.5bn owed to the Nigerian Bulk Electricity Trading Plc (NBET) and N41bn owed to the Nigerian Independent System Operator (NISO).
The Commission added that KAEDCO had accumulated another N14.26bn in non-market statutory and third-party obligations.
According to NERC, since ASI Engineering took over the company in June 2024, KAEDCO accrued additional market debt of more than N118.6bn as of May 2026.
The regulator said the core investor and KAEDCO had also persistently failed to provide NBET and NISO with acceptable payment bank guarantees as required under their vesting contract and the Market Rules of the Nigerian Electricity Supply Industry (NESI).
It further stated that the core investor had failed to present a credible payment plan for settling the outstanding liabilities.
NERC said KAEDCO’s financial difficulties were compounded by poor commercial performance, noting that the company paid only 41.93 per cent of its adjusted market invoices, leaving a market shortfall of approximately N46.71bn in the review period ending December 31, 2025.
The Commission attributed the poor payment performance largely to KAEDCO’s high Aggregate Technical, Commercial and Collection (ATC&C) losses, which stood at 71.88 per cent during the 2025 review period.
This, it said, meant that KAEDCO was only able to account for about 28.2 per cent of the electricity received and delivered to end-use customers.
NERC said its investigations showed that regulatory concessions and government interventions had failed to reverse the company’s deteriorating financial and operational position.
It disclosed that approximately N6.58bn in regulatory derogations had been granted to KAEDCO between January 2024 and May 2026, while aggregate Federal Government intervention disbursements to the company since July 2018 stood at approximately N53.79bn.
Despite these interventions, the Commission said KAEDCO continued to underperform, creating significant risks to electricity consumers, creditors, market stability and the continuity of electricity supply.
NERC said its assessment confirmed that KAEDCO was experiencing severe liquidity constraints and that its commercial viability and continued participation in the electricity market posed a systemic risk to the Nigerian Electricity Supply Industry.
The regulator further said KAEDCO’s board had failed to provide a credible, funded and measurable strategy for capital injection, improved operational efficiency and sustainable recovery.
Following the failure to produce such a plan, NERC said it issued a notification of imminent regulatory intervention to KAEDCO’s major shareholders and the Africa Export-Import Bank (Afreximbank), allowing the parties to present a credible plan to address the utility’s financial difficulties.
The Commission said the parties failed to provide an acceptable solution, prompting the regulatory intervention under the provisions of the Electricity Act 2023.
NERC, however, ordered the dissolution of KAEDCO’s board, removing all its directors from office.
It said the newly appointed interim board would oversee the company for six months, with the mandate of halting the company’s persistent underperformance, maintaining continuity and quality of electricity supply, and protecting end-use customers and other market participants.
NERC also notified the Corporate Affairs Commission (CAC) and other relevant stakeholders of the board’s dissolution.
The Commission directed that during the special transition period, the CAC must not register or give effect to any change in KAEDCO’s shareholding, directorship or constitutional records without NERC’s prior written approval.
The latest action follows an earlier intervention in January 2024, when NERC dissolved the board of Kaduna Electric over its inability to meet approximately
N110bn in outstanding obligations to the Nigerian Electricity Supply Industry.
An interim board was subsequently appointed and remained in place for about six months before ASI Engineering Limited assumed control of the company in June 2024.
