The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of directors of Kaduna Electricity Distribution Company (KAEDCO), citing worsening financial obligations, poor operational performance and the failure of its investors to present a credible recovery plan.
The regulatory action comes about two years after ASI Engineering Limited took over the distribution company in June 2024.
In an order signed by NERC Chairman, Musiliu O. Oseni, and Commissioner for Legal, Licensing and Compliance, Dafe Akepeneye, the commission said KAEDCO had continued to accumulate debts owed to participants in the Nigerian Electricity Supply Industry (NESI) despite regulatory interventions and government support.
NERC said that by May 2026, KAEDCO’s cumulative market obligation since the electricity sector was privatised had reached approximately ₦456.5 billion.
The amount comprised ₦415.5 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41 billion owed to the Nigerian Independent System Operator (NISO).
The company also had other non-market statutory and third-party obligations amounting to ₦14.26 billion.
NERC said the situation had deteriorated further since ASI took over the company.
“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.”
The commission also faulted KAEDCO’s collection and operational performance, saying the company paid only 41.93 per cent of its adjusted market invoices during the review period ending December 31, 2025.
“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.”
NERC said government interventions had also failed to reverse the company’s decline.
According to the commission, about ₦6.58 billion in regulatory derogations was granted between January 2024 and May 2026, while aggregate Federal Government interventions since July 2018 stood at approximately ₦53.79 billion.
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“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.”
The commission said KAEDCO’s board failed to provide a credible, funded and measurable plan for fresh capital injection, improved operational efficiency and sustainable recovery.
NERC said it had earlier notified the company’s major shareholders and Afreximbank of its intention to intervene unless a credible financial recovery plan was presented.
It has now appointed an interim board for six months to stabilise the company, protect customers and other market participants, and maintain electricity service.
“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.”
The latest intervention follows an earlier NERC decision in January 2024 to dissolve the board of Kaduna Electric over its inability to meet about ₦110 billion in obligations to the Nigerian electricity market.
An interim board subsequently managed the company before ASI Engineering Limited assumed control in June 2024.