The Nigerian Electricity Regulatory Commission, NERC, on Monday, August 10, 2026, dissolved the board of Kaduna Electricity Distribution Plc, KAEDC, over approximately N456.5bn in cumulative market obligations and prolonged financial and operational difficulties.

The regulator appointed an interim board of special directors and directed the commencement of an open and transparent process to secure a new core investor for the Kaduna electricity distributor.

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The decisions were contained in Order No. NERC/2026/086, titled “Order on the Regulatory Intervention in Kaduna Electricity Distribution Plc Pursuant to the Electricity Act 2023”, which took effect on Monday.

NERC said the intervention followed an inquiry and consultations with key industry stakeholders, including the Bureau of Public Enterprises, BPE.

The commission said KAEDC was facing what it described as a grave situation, characterised by prolonged regulatory and market defaults, inadequate investment, weak operational and commercial performance, and insufficient assets relative to its liabilities.

According to NERC, KAEDC’s cumulative market obligations since privatisation stood at approximately N456.5bn as of May 2026.

The figure comprises N415.5bn owed to the Nigerian Bulk Electricity Trading Plc, NBET, and N41bn due to the Nigerian Independent System Operator.

The company also had N14.26bn in other non-market statutory and third-party obligations, the regulator said.

NERC further disclosed that KAEDC accumulated more than N118.6bn in additional market debt between June 2024 and May 2026, after ASI Engineering Limited took over its operations.

The commission said KAEDC paid only 41.93 per cent of its adjusted market invoices in 2025, leaving a market shortfall of approximately N46.71bn.

NERC attributed the weak remittance performance partly to KAEDC’s aggregate technical, commercial and collection losses, which reached 71.88 per cent in 2025.

The regulator said the losses meant the company could account for only 28.2 per cent of the electricity it received and delivered to end-use customers during the review period.

Capital investment also fell significantly below the level required for the company’s recovery.

NERC said KAEDC recorded approximately N2.48bn in capital expenditure in 2025, against a minimum provision of N24.51bn. That represented only 10 per cent performance against the required level.

The commission also raised concerns about the company’s metering performance, saying coverage remained between 33.26 per cent and 35.54 per cent after ASI assumed control.

NERC said KAEDC’s difficulties persisted despite approximately N6.58bn in regulatory derogations granted between January 2024 and May 2026 and about N53.79bn in Federal Government intervention disbursements since July 2018.

“The continued underperformance therefore poses material risk to end-use customers, creditors, market stability and continuity of electricity service,” NERC stated.

The commission said it had previously notified KAEDC’s major shareholders and Afrexim Bank about the impending intervention and asked them to present a credible plan to address the company’s financial position.

Representatives of ASI, NERC, BPE, Afrexim Bank and Fidelity Bank subsequently met on June 11, 2026, to consider proposals aimed at rescuing the company.

NERC said the parties had established that ASI had not complied with conditions attached to its acquisition of a 60 per cent majority shareholding in KAEDC and had also failed to meet certain BPE requirements.

ASI later requested an extension of up to 24 months to stabilise KAEDC’s cash flow, prioritise critical investments and improve its market remittance performance.

However, NERC rejected the request, saying ASI had been in effective control of KAEDC since June 2024 without delivering a corresponding improvement in its financial and operational performance.

“The commission, BPE and Afrexim considered this request against the backdrop of ASI being in effective control of KAEDC since June 2024 without a corresponding improvement in the utility’s financial and operational performance,” the regulator stated.

NERC said a further extension was therefore not justifiable given the continuing risks to electricity customers and the wider market.

The regulator subsequently invoked its powers under Sections 75 to 79 of the Electricity Act 2023 to dissolve KAEDC’s board and preserve the company as a going concern while facilitating a transition to a credible core investor.

The existing board was removed from office with immediate effect.

“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 order stated.

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

The other members are Engr Francis Agoha, Mr Aliyy Aliyu, retired Major General Henry Ayamasaowei, Dr Haliru Dikko, Mr Ayodeji Gbeleyi, representing the BPE, and Dr Abubakar Umar Hashidu.

Hashidu, the incumbent Managing Director and Chief Executive Officer, was also appointed administrator for an initial six-month term, subject to review by NERC.

The administrator is expected to oversee KAEDC’s daily operations, implement interim board resolutions and NERC directives, and safeguard the company’s assets and records.

The regulator also withdrew the Know-Your-Licensee approvals issued to KAEDC’s management team and directed affected executives to present themselves for revalidation.

NERC further instructed Afrexim Bank to coordinate an open, competitive and transparent process for selecting a replacement core investor.

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

The latest intervention reflects the depth of the financial crisis surrounding KAEDC. NERC had previously taken regulatory action against the company over its financial obligations, while subsequent regulatory measures sought to clarify its assets and liabilities.

For customers in KAEDC’s franchise area, the immediate priority will be continuity of electricity distribution as the interim management attempts to stabilise the company and prepare it for a new ownership structure.

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The regulator said the intervention was designed to protect end-use customers, creditors and market stability while providing a structured route towards the long-term recovery of the distribution company.