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), citing the company's substantial N456.5 billion in cumulative market obligations and persistent financial and operational challenges. This regulatory action marks a significant intervention aimed at addressing the deep-seated issues plaguing the electricity distribution company.

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The Nigerian Electricity Regulatory Commission has dissolved the board of Kaduna Electricity Distribution Plc over the company’s N456.5bn cumulative market obligations and prolonged financial and operational challenges.

NERC has appointed an interim board comprising special directors and has initiated a transparent process to select a new core investor for KAEDC. This decision, detailed in Order No. NERC/2026/086, took effect on Monday, August 10, 2026. The intervention was prompted by an inquiry and consultations with key stakeholders, including the Bureau of Public Enterprises, and was deemed necessary due to KAEDC's prolonged defaults in regulatory and market compliance, insufficient investment, and weak performance.

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The regulator also appointed an interim board of special directors and directed the commencement of a transparent process for the selection of a new core investor for the electricity distribution company.

According to NERC, KAEDC's market obligations since its privatization amounted to approximately N456.5 billion by May 2026. This figure includes N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc and N41 billion to the Nigerian Independent System Operator, along with other non-market obligations totaling N14.26 billion. Since ASI Engineering Limited assumed operations in June 2024, KAEDC has reportedly accrued an additional N118.6 billion in market debt by May 2026.

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The commission, following its inquiry and consultation undertaken with key industry stakeholders including the Bureau of Public Enterprises, finds that Kaduna Electricity Distribution Plc is in a grave situation characterised by prolonged regulatory and market default, inadequate investment, weak operational and commercial performance, insufficient assets relative to liabilities, and inability to present a credible pathway to sustainable recovery.

The commission highlighted KAEDC's dire situation, characterized by prolonged defaults, inadequate investment, weak operational and commercial performance, and an inability to present a viable recovery plan. In 2025, KAEDC remitted only 41.93 percent of its adjusted market invoices, resulting in a shortfall of about N46.71 billion. This poor remittance is linked to high technical, commercial, and collection losses, which stood at 71.88 percent in 2025, meaning only 28.2 percent of electricity received was accounted for. Furthermore, ASI failed to meet its capital injection commitments, with actual capital expenditure in 2025 being only 10 percent of the required minimum.

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KAEDC’s cumulative market obligation since privatisation stood at approximately N456.5bn as of May 2026, comprising N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and N41bn due to the Nigerian Independent System Operator.