The Nigerian Electricity Regulatory Commission, NERC, has dissolved the board of directors of Kaduna Electricity Distribution Plc., KAEDC, over the company’s cumulative market obligations of N456.5 billion and what the regulator described as “prolonged financial, operational and regulatory failures.”
The commission 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.
The decisions are contained in Order No. NERC/2026/086, titled “Order on the Regulatory Intervention in Kaduna Electricity Distribution Plc Pursuant to the Electricity Act 2023,” which took effect on Monday, August 10, 2026.
*N456.5bn Market Debt*
According to the order, the intervention followed “an inquiry and consultations with key industry stakeholders, including the Bureau of Public Enterprises (BPE), over KAEDC’s prolonged regulatory and market defaults, inadequate investment and weak operational and commercial performance.”
NERC said “the company’s cumulative market obligation since its privatisation stood at approximately N456.5 billion as of May 2026.” The debt comprises “about N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and another N41 billion due to the Nigerian Independent System Operator.”
The regulator also identified “other non-market statutory and third-party obligations amounting to N14.26 billion.”
NERC said the financial crisis worsened after ASI Engineering Limited took over the operations of KAEDC in June 2024.
“According to the commission, the company accumulated additional market debt of more than N118.6 billion between the takeover and May 2026.”
“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,” NERC said.
NERC said KAEDC paid only “41.93 per cent of its adjusted market invoices in 2025, resulting in a market shortfall of approximately N46.71 billion during the year.”
The regulator attributed the poor performance to “high aggregate technical, commercial and collection losses.”
According to NERC, “the losses stood at 71.88 per cent in 2025, meaning that KAEDC could account for only about 28.2 per cent of the electricity it received and delivered to end-use customers during the period under review.”
The commission said the performance was “inconsistent with the financial and operational requirements expected of a distribution company participating in the Nigerian Electricity Supply Industry.”
NERC also faulted KAEDC over capital investment. “The company’s actual capital expenditure in 2025 was approximately N2.48 billion, compared with a minimum capital expenditure provision of N24.51 billion. This represented only about 10 per cent performance against the prescribed investment requirement.”
The commission noted that “KAEDC’s meter coverage remained between 33.26 per cent and 35.54 per cent since ASI took over the company,” despite interventions to support metering.
Despite support, the company’s difficulties persisted. NERC said KAEDC “received approximately N6.58 billion in regulatory derogations between January 2024 and May 2026” and “benefited from aggregate Federal Government intervention disbursements of approximately N53.79 billion since July 2018.”
“Despite the interventions, the regulator said KAEDC failed to demonstrate a sustainable turnaround.
‘The continued underperformance therefore poses material risk to end-use customers, creditors, market stability and continuity of electricity service,’” NERC stated.
It added that its analysis showed KAEDC was experiencing “severe liquidity constraints” and that its viability “posed a systemic risk to the Nigerian Electricity Supply Industry.”
NERC said it had notified KAEDC’s major shareholders and Afrexim Bank about the impending intervention. A meeting was held on June 11, 2026 with ASI Engineering, NERC, BPE, Afrexim Bank and Fidelity Bank.
According to NERC, the parties established that “ASI had not complied with conditions attached to its acquisition of a 60 per cent majority shareholding in KAEDC and had also failed to meet BPE requirements for finalising the shareholding arrangements.”
ASI later requested “an extension of up to 24 months to stabilise KAEDC’s cash flow,” but NERC rejected it.
“The commission, BPE and Afrexim considered this request against the backdrop of ASI being in effective control of KAEDC since June 2024 without a corresponding improvement in the utility’s financial and operational performance, and determined that a further extension of comparable duration was not justifiable in view of the continuing risk to end-use customers and the market,” NERC said.
NERC said it resolved to exercise its powers “under Sections 75 to 79 of the Electricity Act 2023 to intervene in the company” with the objective “to preserve KAEDC as a going concern while facilitating a transparent transition to a credible core investor within 12 months.”
Consequently, the commission ordered: “KAEDC’s board of directors is HEREBY DISSOLVED. All directors of KAEDC are removed from office, and the existing board stands dissolved pursuant to section 75 of the EA.”
NERC appointed seven special directors to constitute an interim board. Dr Abdullahi Garba was appointed chairman. The commission also retained the company’s incumbent MD/CEO, Dr Abubakar Umar Hashidu, as Administrator “for an initial six-month period, subject to review by NERC.”
Under the new arrangement, the administrator “is responsible for the day-to-day management of KAEDC and is expected to ensure continuity of electricity distribution services.”
The intervention is not the first. “In January 2024, the commission issued Order No. NERC/2024/001, dissolving the company’s board and appointing an administrator and special directors following what it described at the time as pervasive failure and non-performance.”
NERC said the latest action represents “a renewed attempt by the electricity regulator to prevent the company’s deteriorating financial position from threatening electricity market stability and service continuity.”
The commission said the process for selecting a new core investor “would be transparent and aimed at securing an investor capable of restoring the financial and operational viability of Kaduna DisCo.”