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By Adewale Sanyaolu
The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) and appointed an interim management team after the electricity distributor slipped deeper into financial and operational distress, accumulating N456.5 billion in market obligations as of May 2026.
The intervention marks the latest and potentially most significant reset of the Kaduna DisCo since Nigeria’s power sector privatisation in 2013, coming less than two years after its latest core investor, ASI Engineering Ltd, assumed operational control.
It also raises fresh questions about the sustainability of the ownership and governance model of KAEDC, following the earlier failure of North West Power Limited, the company’s first core investor, which eventually exited the business after a prolonged period of financial and operational breaches.
In an order dated August 10, 2026 and signed by NERC Chairman, Dr. Musiliu Oseni, and Commissioner for Legal, Licensing and Compliance, Dafe Akpeneye, the Commission said the latest action was taken under Section 75 of the Electricity Act in response to the utility’s deteriorating financial position, persistent market defaults and failure to meet key operational and investment obligations.
According to the Commission, KAEDC owed N415.5 billion to Nigerian Bulk Electricity Trading Plc (NBET) and another N41 billion to the Nigerian Independent System Operator (NISO), while its other non-market liabilities stood at N14.26 billion.
NERC said N118.6 billion of the market debt was accumulated in less than two years under ASI Engineering, which assumed control of the DisCo in June 2024 after receiving conditional regulatory approval in January of that year.
The scale of the deterioration was further reflected in the company’s 2025 financial performance. NERC said KAEDC settled only 41.93 per cent of its adjusted market invoices during the year, resulting in a market shortfall of N46.71 billion.
The Commission said the company’s operational indicators were equally troubling, with Aggregate Technical, Commercial and Collection (ATC&C) losses reaching 71.88 per cent.
Only 28.2 per cent of the electricity received by the DisCo during the review period was successfully billed to customers, while metering coverage remained between 33.26 per cent and 35.54 per cent despite interventions by NERC and the Federal Government.
Investment performance was also significantly below regulatory requirements.
NERC said KAEDC invested only N2.48 billion in capital expenditure in 2025, against a minimum requirement of N24.51 billion, representing an execution rate of just about 10 per cent.
The regulator consequently described the situation as a grave breach of market rules, citing persistent payment defaults, weak governance and failure to meet minimum investment obligations.
The latest crisis effectively brings the curtain down on ASI Engineering’s attempt to stabilise the Kaduna electricity franchise.
ASI took over the DisCo after the collapse of the previous ownership arrangement involving North West Power Limited, which acquired a 60 per cent stake in KAEDC during the 2013 privatisation exercise.
North West Power’s tenure subsequently deteriorated amid financial and operational breaches, culminating in NERC commencing a licence revocation process in 2023.
The process eventually paved the way for ASI Engineering to emerge as the next core investor, with the company receiving conditional regulatory approval in January 2024 and taking operational control in June.
However, less than two years into the new ownership arrangement, NERC has again been compelled to intervene, with the latest figures indicating that the financial position of the DisCo has deteriorated substantially.
The Commission also disclosed that critical conditions attached to ASI’s takeover, including the provision of payment guarantees to NBET and NISO, remained unfulfilled throughout its period of control.
NERC’s latest action therefore goes beyond the removal of an underperforming board, highlighting the difficulty successive investors have faced in turning around a utility weighed down by high technical and commercial losses, weak revenue collection, inadequate metering and large market liabilities.
Under the new arrangement, NERC has appointed a six-month interim management team to oversee the DisCo while a new ownership structure is developed.
Dr. Abubakar Hashidu has been appointed Interim Managing Director and Chief Executive Officer, while Dr. Abdullahi Garba will serve as Chairman. Engr. Francis Agoha has been appointed Special Director, with Mr. Ayodeji Gbeleyi representing the Bureau of Public Enterprises (BPE).
In a significant departure from the previous investor-led restructuring approach, NERC has mandated the African Export-Import Bank (Afreximbank) to lead a transparent, market-driven process for identifying a new core investor for KAEDC within 12 months.
The process is expected to begin with transaction structuring and governance design before moving to investor engagement, bid evaluation and the execution of transfer agreements, subject to the necessary regulatory approvals.
The move suggests that NERC is seeking a more robust financial and governance framework for the DisCo rather than simply replacing one investor with another.
While the investor-selection process is under way, the regulator has also ordered a 90-day reconciliation of KAEDC’s liabilities involving the interim management, NBET, NISO, BPE and other creditors.
The exercise is expected to establish the exact position of the company’s outstanding obligations and provide the basis for a structured debt-resolution framework.
NERC has further imposed strict controls on the interim administration to prevent the financial position of the company from deteriorating further.
The interim management is barred from taking on new borrowing, disposing of assets, entering into related-party transactions or making changes to senior management without prior regulatory approval. Existing management clearances have also been withdrawn pending revalidation.
Despite the severity of the financial crisis, NERC directed the interim management to continue electricity distribution to customers within the company’s available technical capacity.
The team is also expected to maintain applicable service standards, improve operational efficiency and strengthen consumer protection throughout the transition.
The Kaduna DisCo intervention is therefore shaping up as a test of whether a new ownership and governance framework can finally address the structural problems that have persisted since privatisation, after two successive core investors failed to deliver the financial stability and operational improvements expected from private ownership.
