NERC sacks Kaduna Disco board over N456.5bn debt

The Nigerian Electricity Regulatory Commission has dissolved the board of Kaduna Electricity Distribution Plc over the company’s N456.5 billion cumulative market obligations and prolonged financial and operational challenges.

NERC also appointed an interim board of special directors and ordered the commencement of a transparent process to secure a new core investor for the electricity distribution company.

The decisions were contained in Order No. NERC/2026/086, which took effect on Monday, August 10, 2026.

According to the regulator, Kaduna Disco’s cumulative market obligations stood at approximately N456.5 billion as of May 2026, comprising N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc and N41 billion due to the Nigerian Independent System Operator.

The company also had N14.26 billion in other non-market statutory and third-party obligations.

NERC said the financial crisis had worsened since ASI Engineering Limited assumed control of the company in June 2024, with the utility accumulating an additional N118.6 billion in market debt by May 2026.

The commission said Kaduna Disco paid only 41.93 per cent of its adjusted market invoices in 2025, resulting in a shortfall of about N46.71 billion.

It attributed the poor remittance performance largely to the company’s high aggregate technical, commercial and collection losses, which reached 71.88 per cent in 2025.

NERC said the losses meant the company could account for only about 28.2 per cent of the electricity received and supplied to customers during the period.

The regulator also faulted ASI for failing to meet its capital injection commitments. It said Kaduna Disco spent approximately N2.48 billion on capital expenditure in 2025, against a minimum provision of N24.51 billion, representing only 10 per cent performance.

Meter coverage also remained low, ranging between 33.26 per cent and 35.54 per cent since ASI assumed control of the company.

NERC said the company’s poor performance persisted despite about N6.58 billion in regulatory derogations granted between January 2024 and May 2026 and approximately N53.79 billion in Federal Government intervention funds since July 2018.

It warned that the company’s continued financial weakness posed risks to customers, creditors, market stability and electricity service continuity.

The regulator said ASI had previously been given an opportunity to present a credible recovery plan but failed to demonstrate sufficient improvement.

NERC said ASI’s request for an additional 24 months to stabilise the company was rejected because the firm had already been in effective control since June 2024 without a corresponding improvement in its financial and operational performance.

Consequently, NERC invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve the company’s board and facilitate its transition to a new core investor.

The regulator said the intervention was necessary to preserve Kaduna Disco as a going concern and prevent further deterioration of electricity distribution services.

NERC appointed seven special directors to oversee the transition, with Dr Abdullahi Garba as chairman.

Other members of the interim board are Engr. Francis Agoha, Mr Aliyy Aliyu, retired Maj.-Gen. Henry Ayamasaowei, Dr Haliru Dikko, Mr Ayodeji Gbeleyi, representing 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 term.

NERC said the administrator would oversee day-to-day operations, ensure continuity of electricity supply, implement interim board decisions and safeguard the company’s assets and records.

The commission also withdrew the Know-Your-Licensee approvals previously issued to members of Kaduna Disco’s management team and directed them to undergo revalidation.

Meanwhile, NERC directed Afrexim Bank to coordinate an open and competitive process for selecting a replacement core investor for Kaduna Disco.

The preferred investor must be presented to NERC for approval, with the process expected to be completed within 12 months unless the commission grants a written extension.