JUST IN: NERC dissolves Kaduna Disco board over N456bn debt

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Plc (KAEDC) over its mounting financial obligations and persistent operational shortcomings. The decision, outlined in Order No. NERC/2026/086, was issued on Monday, August 10, 2026, and marks a significant regulatory intervention under the Electricity Act 2023. NERC attributed the dissolution to KAEDC's prolonged regulatory and market defaults, inadequate investment, and weak operational and commercial performance. The move follows extensive inquiries and consultations with key industry stakeholders, including the Bureau of Public Enterprises. Since its privatization, KAEDC has accumulated a cumulative market obligation of approximately N456.5 billion as of May 2026. This includes N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and N41 billion due to the Nigerian Independent System Operator (NISO). Additionally, the company faces non-market statutory and third-party obligations totaling N14.26 billion. Since ASI Engineering Limited assumed control of KAEDC in June 2024, the company has incurred an additional N118.6 billion in market debt. These figures underscore the severity of the financial crisis facing the utility. NERC highlighted that KAEDC's poor remittance performance contributed significantly to its current predicament. In 2025, the company managed to pay only 41.93 percent of its adjusted market invoices, leading to a market shortfall of around N46.71 billion. This shortfall was directly tied to the company's high Aggregate Technical, Commercial, and Collection (ATC&C) losses, which reached 71.88 percent during the same period. As a result, KAEDC was able to deliver only 28.2 percent of the electricity consumed by end-users, highlighting the inefficiencies plaguing the company. The regulator also criticized ASI for failing to meet its capital injection commitments toward recapitalizing the utility. According to NERC, KAEDC's actual capital expenditure in 2025 amounted to approximately N2.48 billion, far below the minimum requirement of N24.51 billion. This represents just 10 percent of the planned capital spending. Despite multiple interventions and regulatory derogations, the company's financial health has deteriorated further. NERC noted that the company's meter coverage, crucial for effective service delivery, has remained stagnant between 33.26 percent and 35.54 percent since ASI took over, despite efforts to improve meter deployment. In response to the worsening situation, NERC appointed Dr. Abubakar Umar Hashidu, the Managing Director/Chief Executive Officer of KAEDC, as the interim administrator for an initial six-month period. This step aims to stabilize the company and ensure continued service delivery to consumers. The regulator emphasized that the ongoing underperformance poses a serious risk to end-users, creditors, and the overall stability of the electricity market. NERC warned that the company's liquidity issues and lack of viable business models threaten the sustainability of the National Electrification Service Infrastructure (NESI). Earlier this year, NERC had already notified KAEDC's major shareholders and Afrexim Bank of the impending regulatory action, requiring them to submit a credible plan to address the company's financial challenges. Representatives from ASI, NERC, the Bureau of Public Enterprises, Afrexim Bank, and Fidelity Bank convened on June 11, 2026, to explore potential solutions for rescuing KAEDC. However, the discussions did not yield satisfactory results, prompting the formal dissolution of the board and the appointment of an interim administrator. The next steps will likely involve a transparent process for selecting a new core investor, as mandated by NERC.