The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of directors of Kaduna Electricity Distribution Plc (KAEDC), citing prolonged financial, operational and regulatory failures that it says pose a systemic risk to Nigeria’s electricity market.
The regulatory intervention, contained in Order No. NERC/2026/086, takes effect from August 10, 2026, and provides for the appointment of an interim board of special directors, withdrawal of the “Know Your Licensee” (KYL) approvals previously granted to members of the company’s management team, and the appointment of the incumbent Managing Director/Chief Executive Officer as administrator for an initial six-month period.
NERC said the intervention was necessary to preserve KAEDC as a going concern and facilitate a transparent transition to a new, credible core investor within 12 months.
According to the Commission, KAEDC’s cumulative market obligations since privatisation had risen to approximately N456.5 billion as of May 2026. The debt comprises about N415.5 billion owed to Nigerian Bulk Electricity Trading Plc (NBET), with additional obligations owed to the Nigerian Independent System Operator (NISO), as well as other statutory and third-party liabilities.
The Commission said KAEDC accumulated more than N18.6 billion in additional market debt between June 2024, when ASI Engineering Limited assumed operational control, and May 2026.
NERC further accused the core investor and KAEDC of repeatedly failing to provide acceptable payment bank guarantees to NBET and NISO, as required under the relevant vesting contracts and market rules.
The Commission said the company’s financial and operational performance had deteriorated despite regulatory concessions and government interventions.
In 2025, KAEDC reportedly remitted only 41.93 per cent of adjusted market invoices, resulting in a market shortfall of approximately N46.71 billion.
The Commission linked the poor remittance performance to KAEDC’s extremely high Aggregate Technical, Commercial and Collection (ATC&C) losses, which stood at 71.88 per cent in 2025.
This, according to NERC, meant that the company was able to account for only about 28.2 per cent of the electricity received and delivered to its customers during the review period.
The regulator also said KAEDC failed to meet its capital expenditure obligations. While a minimum capital expenditure of approximately N24.51 billion was expected in 2025, actual expenditure was only about N2.48 billion, representing roughly 10 per cent performance.
Metering also remained a major concern, with KAEDC’s customer metering coverage remaining between about 33 and 36 per cent despite interventions designed to accelerate meter deployment.
NERC said the company’s poor performance persisted even after approximately N6.58 billion in regulatory derogations granted between January 2024 and May 2026 and about N53.79 billion in Federal Government intervention disbursements since July 2018.
The Commission said these interventions had failed to reverse the utility’s deterioration and that the continued underperformance posed significant risks to customers, creditors, market stability and the continuity of electricity supply.
ASI takeover conditions
NERC also faulted ASI’s takeover of a 60 per cent equity stake in KAEDC, saying several conditions attached to the Commission’s January 2024 conditional No-Objection remained unfulfilled.
The conditions included demonstrating the technical capacity of ASI’s nominated technical partner, Akanksha Power and Infrastructure Limited (APIL), submitting a credible turnaround plan, meeting key performance indicators, providing a competent management team, reducing ATC&C losses, supporting the transition to bilateral electricity trading and providing adequate market payment security.
The Commission said ASI assumed effective operational control of KAEDC in June 2024 but failed to demonstrate satisfactory compliance with the conditions.
NERC said ASI had claimed in August 2025 that it had strengthened internal controls, restructured its technical teams, introduced customer-focused initiatives, engaged technical partners, commenced loss-reduction and advanced-metering projects and pursued significant equity and debt financing.
However, the regulator said the submissions did not provide sufficient evidence that the promised investments and turnaround measures had been implemented.
24-month extension rejected
The Commission disclosed that, following a notification of imminent regulatory intervention, representatives of ASI met with NERC, the Bureau of Public Enterprises (BPE), Afreximbank and Fidelity Bank in June 2026 to discuss possible measures to rescue KAEDC.
At the meeting, according to NERC, the parties acknowledged that ASI had not complied with the conditions imposed for its acquisition of the majority stake in KAEDC and had also not fulfilled BPE requirements for finalising the shareholding arrangements.
ASI subsequently requested an additional 24 months to stabilise KAEDC’s cash flow, undertake critical investments and improve its performance.
NERC rejected the request, saying ASI had already been in effective control of the utility for more than two years without delivering the required financial and operational turnaround.
The Commission also said ASI failed to provide a credible plan to support its request for the additional two-year period.
Board dissolved
Invoking its powers under Sections 75 to 79 of the Electricity Act 2023, NERC ordered the dissolution of KAEDC’s board of directors.
It said the decision was taken after an inquiry into the company’s conduct and operations and a determination that KAEDC was in a “grave situation”.
The Commission said KAEDC had persistently demonstrated an inability to discharge material obligations under the Electricity Act, its licence and other regulatory instruments.
It also determined that the company was in prolonged default, had governance conditions detrimental to stakeholders and the undertaking, and had insufficient assets relative to its liabilities, creating a material risk of insolvency and receivership.
Under the order, the Corporate Affairs Commission (CAC) has been notified of the board’s dissolution and directed not to register or give effect to changes in KAEDC’s shareholding, directorship or constitutional records during the transition period without NERC’s prior written approval.
Interim board appointed
NERC appointed an interim board of special directors to oversee the company during the transition.
The order names Dr. Abdullahi Garba as Chairman and Engr. Francis U. Agoha, Major General Henry E. Ayamasaowei (rtd.), Dr. Haliru Dikko and Mr. Ayodeji A. as members of the interim board, based on the names contained in the order.
The interim board is empowered to exercise governance and oversight functions subject to NERC’s order and directives, the Electricity Act and KAEDC’s licence obligations.
NERC said any vacancy or replacement on the interim board would be determined solely by the Commission.
The intervention is intended to run during a special transition period ending when the utility is transferred to a replacement core investor approved by NERC, or when the Commission otherwise terminates, extends or varies the intervention through a subsequent order.
The Commission said the ultimate objective is to safeguard electricity supply to KAEDC’s customers, protect market participants and creditors, and ensure that the distribution company is transferred to a financially and technically capable investor capable of restoring its viability.
