By Bassey Udo
The Nigerian Electricity Regulatory Commission (NERC) on Monday wielded its regulatory powers by revoking the operational license of the Kaduna Electricity Distribution PLC over alleged N636.07bn debt and prolonged regulatory infractions.
In an official regulatory intervention order No. NERC/2026/086 signed by its Chairman, Musiliu Oseni, and Commissioner in charge of Legal, Licensing & Compliance, Dafe Akpeneye, the Commission said the action was pursuant to Sections 75–79 of the Electricity Act 2023.
The Commission said the DISCo, whose operations were taken over by ASI Engineering Limited in June 2024 as its core investor, with Akanksha Power and Infrastructure Limited as Technical Partner, was found culpable of grave infractions bordering on prolonged regulatory and market default, inadequate investment, weak operational and commercial performance, insufficient assets relative to liabilities, and no credible recovery pathway.
Apart from a cumulative indebtedness of N456.5bn as at May 2026 to the Nigerian Bulk Electricity Trading (NBET) and Nigerian Independent System Operator (NISO) since privatization, the DISCo also had other outstanding non-market statutory and third-party obligations totalling about ₦14.26bn.
Since the takeover by ASI in 2024, NERC said KAEDC accumulated additional debt in excess of ₦118.6bn as at May 2026, while persistently failing to either furnish NBET and NISO with acceptable/credible payment bank guarantees per the Vesting Contract and NESI Market Rules, or presented a credible payment plan.
Out of a total adjusted market invoice of N80.44bn, NERC said KAEDC realised only N33.73bn, leaving a market shortfall of N46.71bn, or 41.93 percent performance level, for the period ending December 31, 2025.
Besides, NERC said KAEDC’s performance in terms of Aggregate Technical, Commercial and Collection Losses (ATC&C) stood at 71.88%, as it accounted for only 28.2% of energy received and delivered to end-use customers in the 2025 review period.
The regulator accused ASI of failure to uphold capital-injection commitments by contributing less than 10 percent of CAPEX performance rate, or about ₦2.48bn only as actual 2025 capital expenditure against a minimum requirement of ₦24.51 billion.
KAEDC’s meter coverage of its end-use customer population, NERC noted, remained low since ASI’s takeover, ranging between 33.26% and 35.54%.
In January 2024, the Commission said it approved ASI’s acquisition of 60% equity in KAEDC subject to a transitional period and a fulfilment of certain conditions prior to assumption of full management control.
The conditions included a demonstration of capacity, technical-support proposal, engagement agreements, compliance plan, credible management team, Shareholders’ Agreement compliance, ATC&C-loss reduction trajectory, bilateral trading transition plan, decentralised market operating plan, and bank guarantee plans.
In addition, the Commission said ASI failed to fully comply with Bureau for Public Enterprises (BPE) requirement for a transparent, value-driven transaction; confirmation of buyer’s financial/technical/operational capability, and Nigerian Electricity Supply Industry (NESI) regulator’s No-Objection, among other conditions.
Following ASI’s consistent failure to fulfill its regularory obligations, the Commission said its submissions on evidence of infrastructure investment and technical/advisory engagement in line with the original takeover conditions were found to be inadequate.
Apart from about ₦6.58bn in regulatory support granted between January 2024 and May 2026, the Commission said aggregate Federal Government intervention disbursements to KAEDC since July 2018 stood at about ₦53.79bn.
Despite a notification to its major shareholders and Afreximbank about an impending regulatory intervention, NERC said the KAEDC still failed to provide an acceptable sustainability plan.
Consequently, on June 11, 2026, the Commission said representatives of ASI met with it, along with BPE, Afreximbank and Fidelity Bank Plc, where all parties agreed the core investor defaulted in fulfilling the takeover conditions and BPE’s shareholding-finalisation requirements.
Although during the meeting ASI requested for a 24-month extension to stabilise cash flow, prioritise critical investments and deliver measurable performance improvements, including a pathway to full market remittance, the Commission said the core investor again failed to provide a credible plan backing its request.
Consequently, the Commission said it resolved to exercise its powers under sections 75–79 of the Electricity Act to dissolve KAEDC’s board, to preserve the company as a going concern and to achieve a transparent transition to a credible core investor within the next 12 months.
In dissolving the board of directors of KAEDC, the Commission announced the Constitution of an interim Board for a transition period of 12 months to exercise governance and oversight powers subject to the provisions of the subsisting Order, the Electricity Act and licence obligations.
The interim Board has as its Chairman, Dr. Abdullahi Garba, with six special directors, including Engr. Francis Agoha, Aliyu Aliyu, Henry E. Ayamasaowei, Haliru Dikko, and Ayodeji Gbeleyi, as well as Abubakar Umar Hashidu, the incumbent Managing Director/CEO, as the Administrator for an initial term of six months, subject to Commission review.
The Administrator is expected to oversee the day-to-day running of operations, implementation of interim-board resolutions and Commission directives, while safeguarding assets and records, as well as files matters reserved for approval.
Meanwhile, the Administrator is expected to, within 60 days, draw up a 12-month stabilisation plan covering cash-flow controls, market remittance, collections, metering, energy accounting, loss reduction, service reliability, safety, customer complaint resolution, capital expenditure, procurement, staff obligations and legacy liabilities.
The plan must identify monthly milestones, accountable officers, funding sources and measurable outcomes.
While Afreximbank would work with the Commission to select the preferred investor for approval as the new core investor, the Administrator would liaise with the BPE, NBET, NISO and other creditors to reconcile KAEDC’s liabilities and file a liability-management plan within 90 days.
