NERC dissolves KAEDC board over ₦456.5bn debt crisis

By Onu Okorie

Nigerian Electricity Regulatory Commission NERC has dissolved the board of Kaduna Electricity Distribution Plc KAEDC and placed the struggling utility under an interim administration, in one of the most far-reaching regulatory interventions in Nigeria’s power sector in recent years.
In an order dated August 10, 2026 and numbered NERC/2026/086, the Commission said it was stepping in to prevent the collapse of a company it described as being in “a grave situation” and burdened by mounting debt, chronic underinvestment, and a core investor that has repeatedly failed to meet the conditions of its takeover.
According to the order, KAEDC’s cumulative market debt since privatisation had climbed to roughly ₦456.5 billion as of May 2026. Of that, about ₦415.5 billion is owed to the Nigerian Bulk Electricity Trading Plc, with further sums owed to the Nigerian Independent System Operator and an additional ₦14.26 billion in other statutory and third-party obligations.
The picture worsened, NERC said, after ASI Engineering Limited took operational control of the company in June 2024. Since then, KAEDC has piled on more than ₦118.6 billion in fresh market debt, even as ASI and the company repeatedly failed to provide the credible bank guarantees required under Nigeria’s electricity market rules.
The company’s collection record tells a similarly bleak story. In the year ending December 2025, KAEDC paid just 41.93 percent of its adjusted market invoices, leaving a shortfall of about ₦46.71 billion. NERC attributed the gap to KAEDC’s Aggregate Technical, Commercial and Collection losses of 71.88 percent, meaning the utility was able to account for barely a quarter of the electricity it received and distributed to customers.
Metering coverage has fared no better, hovering between roughly 33 and 36 percent of the customer base throughout ASI’s tenure, despite multiple sector-wide interventions aimed at expanding meter access.
Investment Promises Unmet
NERC’s order paints ASI as a core investor that consistently promised more than it delivered. When the Commission granted conditional approval in January 2024 for ASI, working with technical partner Akanksha Power and Infrastructure Limited, to acquire 60 percent of KAEDC, it attached a lengthy list of conditions, including proof of technical capacity, a credible loss-reduction plan, bank guarantees for market operators, and a competent management team cleared through the Commission’s “Know-Your-Licensee” vetting process.
Those conditions, NERC found, were never fully met. Actual capital expenditure in 2025 came to about ₦2.48 billion against a required minimum of ₦24.51 billion — a performance rate of roughly 10 percent, and one only achieved after the Commission granted forbearance.
In an August 2025 letter to NERC, ASI had insisted it was meeting its obligations, pointing to restructured technical teams, loss-reduction projects, renewable energy initiatives and efforts to secure financing. But the Commission said the company failed to back up those claims with adequate documentation, concluding that “the promised turnaround, capital injection, loss reduction, metering deployment, market securitisation and operational improvements were not achieved.”
Government Support Failed to Turn the Tide
The intervention comes despite substantial public support extended to the utility. NERC noted that around ₦6.58 billion in regulatory derogations was granted between January 2024 and May 2026, on top of roughly ₦53.79 billion in Federal Government intervention funding disbursed since 2018. Neither, the Commission said, was enough to reverse KAEDC’s decline.
Before moving to intervene, NERC said it gave KAEDC’s shareholders and the Africa Export-Import Bank (“Afrexim”) formal notice of the impending action, demanding a credible recovery plan. That led to a meeting on June 11, 2026 at Afrexim’s offices, attended by representatives of ASI, the Bureau of Public Enterprises, Afrexim and Fidelity Bank Plc.
At that meeting, all parties reportedly agreed that ASI had not met the conditions attached to its 60 percent shareholding. ASI asked for a further 24 months to stabilise the company’s finances and improve performance. NERC, together with BPE and Afrexim, rejected the request, citing ASI’s two years of effective control without measurable improvement — and the company’s inability, even after the June meeting, to produce a credible plan to justify the extension.

Invoking its powers under sections 75 to 79 of the Electricity Act 2023, NERC has dissolved KAEDC’s board of directors with immediate effect, removing all sitting directors.
Withdrawn Know-Your-Licensee approvals previously issued to the company’s management team.
Appointed the incumbent Managing Director/CEO as Administrator for an initial six-month term.
Installed an interim board of special directors, chaired by Dr. Abdullahi Garba, alongside Engr. Francis U. Agoha, Major General Henry E. Ayamasaowei (rtd), Dr. Haliru Dikko and Mr. Ayodeji A.
Barred the Corporate Affairs Commission from registering any change to KAEDC’s shareholding, directorship or constitutional documents during the transition period without NERC’s written approval.
The Commission said the goal of the intervention is to keep KAEDC running as a going concern while it manages a transparent process, expected to take up to 12 months — to bring in a new, financially and technically capable core investor. Any sale, per the Electricity Act, must go to the highest and best bidder.
NERC stressed that the move was not taken lightly, noting that ASI and KAEDC were given “sufficient due process” before the Commission acted, but that continued delay risked a disorderly disruption to electricity supply in the utility’s coverage area and posed a systemic risk to Nigeria’s wider power market.
“The Commission… is obliged to act in the public interest and to safeguard continuity of distribution services,” the order states, adding that KAEDC’s finances point to insufficient assets relative to its liabilities and a material risk of insolvency.
The order takes effect immediately and will remain in force until amended or revoked by the Commission.