The Nigerian Electricity Regulatory Commission has dissolved the board of Kaduna Electricity Distribution Plc over its mounting financial obligations and persistent failure to meet regulatory and operational requirements.
The commission, in an order that took effect on Monday, appointed an interim board to oversee the company while arrangements are made to secure a new core investor for the electricity distribution firm.
The regulatory action followed an assessment of the company’s financial and operational position, which NERC said had deteriorated despite several interventions aimed at improving its performance.
According to the commission, KAEDC’s outstanding market obligations had risen to about N456.5bn as of May 2026. The debt comprises N415.5bn owed to the Nigerian Bulk Electricity Trading Plc and another N41bn payable to the Nigerian Independent System Operator.
NERC further disclosed that the company had accumulated additional market debt of over N118.6bn since ASI Engineering Limited assumed control of the Disco in June 2024.
The regulator attributed the company’s difficulties to poor remittance, high electricity losses, inadequate investment and weak commercial performance.
It said KAEDC remitted only 41.93 per cent of its adjusted market invoices in 2025, leaving a shortfall of about N46.71bn.
The commission also reported that the company recorded aggregate technical, commercial and collection losses of 71.88 per cent during the year, meaning it was able to account for only about 28.2 per cent of the electricity supplied to its customers.
NERC said ASI also fell short of its investment obligations, noting that the company spent about N2.48bn on capital expenditure in 2025, against a minimum requirement of N24.51bn.
The commission added that KAEDC’s metering coverage had remained between 33.26 and 35.54 per cent since ASI took over, despite interventions designed to increase meter deployment.
NERC said the Disco’s financial problems persisted despite receiving about N6.58bn in regulatory reliefs between January 2024 and May 2026, as well as approximately N53.79bn in Federal Government interventions since July 2018.
The regulator said it had previously engaged KAEDC’s shareholders and Afrexim Bank over the company’s deteriorating financial position, but efforts to secure a credible recovery plan failed to produce the desired outcome.
It disclosed that ASI subsequently sought an additional 24 months to improve the company’s cash flow, undertake critical investments and restore its ability to meet market obligations.
NERC, however, rejected the request, arguing that ASI had already exercised effective control of the Disco for more than two years without achieving significant improvement in its financial and operational performance.
The commission said allowing the situation to persist could threaten electricity distribution, creditors and the stability of the Nigerian Electricity Supply Industry.
Consequently, NERC invoked its powers under the Electricity Act 2023 to remove the existing directors and establish an interim governance structure for the company.
Seven special directors were appointed to the interim board, with Dr Abdullahi Garba serving as chairman. Other members include Engr Francis Agoha, Mr Aliyy Aliyu, retired Major General Henry Ayamasaowei, Dr Haliru Dikko, Mr Ayodeji Gbeleyi of the Bureau of Public Enterprises and Dr Abubakar Umar Hashidu.
Hashidu, the incumbent Managing Director and Chief Executive Officer, was also appointed administrator for an initial six-month period.
NERC directed the administrator to ensure uninterrupted electricity distribution, manage the company’s daily affairs, protect its assets and records, and implement decisions of the interim board.
The commission also withdrew the Know-Your-Licensee approvals previously issued to KAEDC’s management team and ordered the affected officials to undergo revalidation.
Meanwhile, Afrexim Bank was directed to commence an open and competitive process for the selection of a replacement core investor.
NERC said the preferred investor must be submitted to it for approval, with the process expected to be concluded within 12 months, unless an extension is granted by the commission.