Nigeria’s electricity regulator, the Nigerian Electricity Regulatory Commission (NERC), has dissolved the board of Kaduna Electricity Distribution Plc (KAEDC) following years of financial, operational and regulatory challenges, including cumulative market obligations of about ₦456.5 billion.
The regulatory intervention, which took effect on Monday, August 10, was carried out under Sections 75 to 79 of the Electricity Act 2023.
According to NERC, KAEDC’s outstanding market obligations had reached approximately ₦456.5 billion as of May 2026. Of this amount, about ₦415.5 billion was owed to Nigerian Bulk Electricity Trading Plc (NBET), while another ₦41 billion was due to the Nigerian Independent System Operator (NISO).
The company also had about ₦14.26 billion in other statutory and third-party obligations outside the electricity market.
NERC said KAEDC’s financial difficulties worsened after ASI Engineering Limited assumed control of the company in June 2024. Between then and May 2026, the distribution company accumulated an additional ₦118.6 billion in market-related debt.
The regulator said the deterioration occurred despite several government and regulatory measures intended to improve KAEDC’s financial position and operational performance.
NERC described the utility as being in a severe condition, citing persistent market and regulatory defaults, inadequate investment, weak commercial and operational performance, and a lack of sufficient assets to cover its liabilities.
The commission also criticised KAEDC’s core investors for failing to provide acceptable payment bank guarantees to NBET and NISO as required under the company’s vesting contract and electricity market rules.
NERC said KAEDC settled only 41.93% of its adjusted market invoices in 2025, resulting in a market shortfall of approximately ₦46.71 billion.
The poor payment performance was largely attributed to the company’s high aggregate technical, commercial and collection losses, which reached 71.88% in 2025. As a result, KAEDC was able to account for only about 28.2% of the electricity it received for distribution to customers.
Investment in the distribution network also fell significantly below regulatory requirements. KAEDC spent about ₦2.48 billion on capital expenditure in 2025, against a minimum requirement of ₦24.51 billion, representing only around 10% of the prescribed investment level.
Metering performance remained weak as well. NERC said meter coverage had stayed between 33.26% and 35.54% since ASI took over the company, despite broader efforts to improve metering across Nigeria’s distribution companies.
The regulator noted that KAEDC had benefited from substantial public and regulatory support. It received about ₦6.58 billion in regulatory derogations between January 2024 and May 2026, in addition to approximately ₦53.79 billion in federal government interventions since July 2018.
NERC said these interventions had not resulted in a credible and sustainable recovery plan, leaving the company’s continued participation in the electricity market a potential risk to customers, creditors and overall market stability.
Before dissolving the board, NERC said it had informed KAEDC’s major shareholders and Afreximbank about the proposed intervention and requested a credible recovery plan.
A meeting involving representatives of ASI Engineering, NERC, the Bureau of Public Enterprises (BPE), Afreximbank and Fidelity Bank was subsequently held on June 11 to consider options for stabilising the company.
According to NERC, the discussions established that ASI had not fulfilled conditions associated with its acquisition of a 60% majority stake in KAEDC and had also failed to satisfy BPE requirements for completing the shareholding arrangements.
ASI later requested an additional 24 months to improve KAEDC’s cash flow, undertake critical investments and strengthen market remittances.
NERC rejected the request after consultations with BPE and Afreximbank, concluding that another extension could not be justified given the limited progress made since ASI assumed effective control in June 2024.
The commission said the continued financial and operational deterioration posed a significant threat to electricity consumers and the wider Nigerian Electricity Supply Industry, making regulatory intervention necessary.