By Seun Ibiyemi
The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of Kaduna Electricity Distribution Company (KAEDC) and taken regulatory control of the utility following a sharp deterioration in its financial and operational performance.
In a regulatory order issued on August 10, 2026, NERC said the intervention was necessary to preserve Kaduna DisCo as a going concern, maintain electricity distribution services and facilitate the transition to a new, financially and technically capable core investor within 12 months.
The commission said Kaduna DisCo’s cumulative market obligations stood at N456.5 billion as of May 31, 2026, comprising N415.5 billion owed to Nigerian Bulk Electricity Trading Plc (NBET) and N41 billion owed to the Nigerian Independent System Operator (NISO).
The utility also had N14.26 billion in other statutory and third-party obligations, further worsening its financial position.
NERC attributed the company’s deteriorating finances to persistent market payment defaults, weak revenue collection, high technical and commercial losses and the failure of its core investor, ASI Engineering Limited, to provide a credible recovery and debt repayment plan.
According to the regulator, ASI Engineering, which assumed operational control of Kaduna DisCo in June 2024, accumulated an additional N118.6 billion in market debt by May 2026.
The commission said Kaduna DisCo and its core investor also repeatedly failed to provide acceptable payment guarantees to NBET and NISO as required under electricity market rules.
NERC further disclosed that Kaduna DisCo paid only 41.93 per cent of its adjusted market invoices during the review period ended December 31, 2025, resulting in a market payment shortfall of N46.71 billion.
The utility’s financial difficulties were compounded by an Aggregate Technical, Commercial and Collection (ATC&C) loss rate of 71.88 per cent during the period.
This meant that Kaduna DisCo was able to account for only about 28.2 per cent of the electricity it received and supplied to customers, according to the regulator.
NERC appoints interim management
As part of the intervention, NERC said it would dissolve the existing board and appoint special directors to serve as an interim board to oversee the company.
The regulator will also withdraw key regulatory approvals previously granted to the existing management team, while retaining the current Managing Director as Administrator for an initial six-month period.
NERC said it would supervise the process of identifying and appointing a replacement core investor with the technical capacity and financial strength required to restore the company’s viability.
The commission said the intervention was being undertaken in the public interest to protect electricity consumers and ensure continuity of distribution services across Kaduna DisCo’s franchise area.
“Further to the meeting of 11 June 2026, the Commission resolved to exercise its powers conferred under sections 75–79 of the EA to dissolve the board of directors of KAEDC by intervening to preserve the undertaking as a going concern and achieve a transparent transition to a credible core investor within 12 months,” NERC said.
Crisis deepened under new investor
The intervention comes about two years after NERC approved ASI Engineering Limited’s acquisition of a 60 per cent equity stake in Kaduna Electricity Company Plc in July 2024.
The new ownership structure was expected to strengthen the company’s financial and operational performance, but the utility subsequently faced a series of debt and governance challenges.
In August 2024, the Kaduna State Internal Revenue Service reportedly sealed the company’s office over alleged tax liabilities of about N600 million.
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Around the same period, Kaduna DisCo disconnected electricity supply to the Kaduna State Government House over an outstanding electricity debt of N2.9 billion.
NERC’s latest action represents a significant escalation in regulatory intervention in Nigeria’s electricity distribution sector, as the commission moves to address persistent financial weaknesses among DisCos.
The Kaduna case also highlights the broader challenges confronting Nigeria’s power market, where high technical and commercial losses, weak revenue collection and market payment defaults continue to undermine the financial sustainability of electricity distribution companies.
The success of the intervention will now depend on whether NERC can secure a credible replacement investor capable of improving collections, reducing losses, meeting market obligations and restoring Kaduna DisCo to sustainable operations.
