The Nigerian Electricity Regulatory Commission (NERC) has announced the dissolution of the board of directors of the Kaduna Electricity Distribution Company (KAEDCO).
This is coming two years after the company was taken over by ASI Engineering Limited in June 2024.
NERC, in an order signed by its Chairman, Musiliu O. Oseni and Commissioner Legal, Licensing & Compliance, Dafe Akepeneye, said the dissolution followed the inability of the new owners to meet up with remittance to the electricity market and also expand its network.
Daily Trust reports that KAEDCO was among six electricity distribution companies taken over by creditors after liquidity challenges left them unable to repay loans obtained to acquire the companies.
Recall that the NERC had, in January 2024, dissolved the board of directors of Kaduna Electric over its inability to pay N110bn debt owed to the Nigeria Electricity Supply Industry.
This led to the appointment of an interim board which oversaw the company for the 6 months before ASI took over.
But NERC, in its order, said as at May 2026, KAEDC’s cumulative market obligation since privatisation stood at approximately ₦456.5bn, comprising ₦415.5billion due to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41bn due to the Nigerian Independent System Operator (NISO).
It said the company had accrued other non-market statutory and third-party obligations in the sum of ₦14.26billion.
“Since the takeover of operations in KAEDC by ASI Engineering Limited (‘ASI’ or the ‘Core Investor’) in June 2024, the Licensee accrued additional market debt in excess of ₦118.6billion as at May 2026. The Core Investors and KEADC have persistently failed to furnish NBET and NISO with acceptable/credible payment bank guarantees in compliance with the terms of their Vesting Contract and the provisions of the Market Rules of the Nigerian Electricity Supply Industry (‘NESI’). The Core Investor has also failed to present a credible payment plan for these liabilities.”
“KAEDC paid only 41.93% of adjusted market invoices, leaving a market shortfall of approximately ₦46.71 billion in the review period ending 31 December 2025. This poor performance is directly linked to KAEDC’s high Aggregate Technical Commercial and Collection Losses (‘ATC&C’) of 71.88%, which means that in 2025 review period, KAEDC was only able to account for only 28.2% of the energy received and delivered to end-use customers.”
The commission explained that further investigations found that substantial regulatory derogations and Federal Government interventions have not reversed the Licensee’s deterioration as approximately ₦6.58bn in derogations was granted from January 2024 to May 2026.
“While aggregate Federal Government intervention disbursements since July 2018 were approximately ₦53.79bn. The continued underperformance therefore poses material risk to end-use customers, creditors, market stability and continuity of electricity service. The analysis confirms that KAEDC is experiencing severe liquidity constraints and that its commercial viability and continued participation in the market poses a systemic risk to NESI.”
It added that despite the commission’s regulatory initiatives and substantial government interventions, KAEDC’s board had failed to present a credible, funded and measurable pathway for capital injection, operational efficiency and sustainable recovery.
It said following the failure of KAEDC to provide a credible plan for the financial sustainability of the utility, a notification of imminent regulatory intervention was issued to its major shareholders and the Africa Export Import Bank (“Afrexim”).
“The notification required the parties to present a credible plan that addresses the financial situation of the utility, failing which the Commission would intervene in accordance with the provisions of the Electricity Act 2023 (‘EA 2023’ or the ‘Act’).”
It, however, announced an interim board for the company to oversee its activities for the next 6 months to halt its pervasive failure and nonperformance in order to maintain continuity and quality of electricity service, protect end-use customers and market participants.
“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. The Commission has notified the Corporate Affairs Commission (CAC) and other relevant stakeholders of the dissolution of the board. The CAC shall not register or give effect to any change in the company’s shareholding, directorship or constitutional records during the special transition period without the Commission’s prior written approval.”
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