KEY POINTS
- NERC dissolved KAEDCO’s board over N456.5bn debt.
- KAEDCO had 71.88% electricity losses in 2025.
- NERC appointed an interim board for six months.
The Nigerian Electricity Regulatory Commission, NERC, has dissolved the board of directors of Kaduna Electricity Distribution Company, KAEDCO, over its failure to meet its financial obligations to the Nigerian electricity market.
The regulatory action comes about two years after ASI Engineering Limited took control of the electricity distribution company in June 2024.
NERC said the decision became necessary after the new owners failed to improve the company’s financial position, make required payments to the electricity market and expand its distribution network.
The commission has also appointed an interim board to manage the company for the next six months as it works to prevent further deterioration and protect electricity consumers.
According to an order issued by NERC, KAEDCO’s total outstanding market obligations stood at about N456.5 billion as of May 2026.
The debt includes approximately N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and another N41 billion owed to the Nigerian Independent System Operator (NISO).
The company also had about N14.26 billion in other obligations, including non-market statutory and third-party debts.
NERC said the company’s financial problems have continued despite the change in ownership and several efforts to support its operations.
Debt increased after ASI takeover
KAEDCO was taken over by ASI Engineering Limited in June 2024 after creditors moved against the company because of financial difficulties that had affected its ability to repay loans used to acquire the business.
However, NERC said the company accumulated more than N118.6 billion in additional market debt between the ASI takeover and May 2026.
The commission said the owners and KAEDCO repeatedly failed to provide acceptable payment guarantees to NBET and NISO as required under the electricity market rules and relevant agreements.
NERC also said the company failed to provide a credible plan for clearing its outstanding liabilities.
The regulator said KAEDCO paid only 41.93 per cent of its adjusted market invoices during the review period ending December 31, 2025.
This left a market payment shortfall of approximately N46.71 billion.
NERC linked the poor payment performance to KAEDCO’s very high Aggregate Technical, Commercial and Collection losses, which stood at 71.88 per cent.
In simple terms, the company was only able to account for about 28.2 per cent of the electricity it received and supplied to customers during the 2025 review period.
The high level of losses means a large amount of electricity supplied to the distribution network was not properly accounted for through technical efficiency, commercial collection or other means. NERC said KAEDCO had received substantial regulatory support and government interventions aimed at helping the company recover.
The commission said about N6.58 billion in regulatory derogations had been granted to KAEDCO between January 2024 and May 2026.
It also noted that total Federal Government intervention payments to the company since July 2018 were approximately N53.79 billion.
Despite these interventions, NERC said the company’s financial and operational situation continued to worsen.
The regulator warned that KAEDCO’s continued poor performance could affect electricity consumers, creditors, other market participants and the stability of Nigeria’s electricity market.
NERC described the company as facing severe liquidity problems and said its continued participation in the electricity market had become a possible systemic risk to the Nigerian Electricity Supply Industry.
The commission said it had introduced several regulatory measures to help KAEDCO improve its financial position and operations.
However, NERC said the company’s board failed to present a credible and properly funded plan showing how it would inject new capital, improve operational efficiency and return the company to sustainable operations.
The regulator had earlier issued a warning to KAEDCO’s major shareholders and Afreximbank, asking them to provide a workable plan to address the company’s financial difficulties.
NERC said the parties were informed that failure to provide such a plan would lead to regulatory intervention under the Electricity Act 2023.
Following the failure to produce a credible plan, NERC moved to dissolve KAEDCO’s board.
The commission said all members of the board had been removed from office and that an interim board would oversee the company for six months.
The interim management is expected to focus on stopping the company’s continued poor performance, maintaining electricity services and protecting consumers and other participants in the electricity market.
NERC also informed the Corporate Affairs Commission and other relevant stakeholders about the board’s dissolution.
During the special transition period, the CAC has been directed not to approve changes to KAEDCO’s shareholding, directorship or constitutional records without NERC’s written approval.
The regulatory action is aimed at maintaining the continuity and quality of electricity supply while efforts are made to address the company’s financial and operational challenges.
The latest decision is the second major intervention by NERC involving Kaduna Electric in recent years, highlighting the serious financial problems facing the distribution company and the wider challenges within Nigeria’s electricity sector.
