The decision by the Nigerian Electricity Regulatory Commission (NERC) to dissolve the board and core investor of the Kaduna Electricity Distribution Company (KAEDCO) over an overwhelming N456.5 billion market debt has drawn intense scrutiny from energy experts, who warn that the intervention lays bare fundamental flaws in the nation’s power sector privatisation framework.
In a regulatory statement issued from its headquarters in Abuja, NERC released Interim Order No. NERC/2026/086, signed by NERC Chairman, Dr. Musiliu Oseni, and Commissioner for Legal, Licensing and Compliance, Dafe Akpeneye.
The Commission invoked Sections 75–79 of the Electricity Act 2023 to dissolve the ASI Engineering-led board of KAEDCO. Under the ownership of ASI Engineering Limited, which took operational control in June 2024, the utility accumulated an additional N118.6 billion in market liabilities within less than two years.
While NERC framed the takeover as a necessary move to protect grid stability and consumer interests, prominent energy sector analysts argue that dissolving boards without addressing systemic policy defects is merely a temporary patch.
”Sacking KAEDCO’s board treats the symptom, not the disease. Without resolving governance gaps at the Bureau of Public Enterprises (BPE), clarifying the role of lenders, injecting long-term capital, and aligning tariffs with costs, Nigeria risks recycling the same crisis across other DisCos.” quoted by Industry Experts Joint Analysis.
Speaking on the regulatory action, energy expert and Chief Executive Officer of New Hampshire Limited, Mr. Odion Omonfoman, questioned why regulators permitted liabilities to balloon to half a trillion Naira before taking action.
”Where was the regulatory intervention window? How did market liabilities accumulate to over N450 billion before decisive regulatory enforcement took place? Allowing under-remittance and performance deficits to compound over years creates systemic debt that becomes nearly impossible for any incoming operator to resolve.” said Mr. Odion Omonfoman.
Omonfoman also pointed to structural oversight flaws within the Bureau of Public Enterprises (BPE), which retains a 40% equity stake in distribution companies on behalf of the Federal Government, raising questions on why state-level oversight failed to flag the utility’s trajectory earlier.
In response to the insolvency, NERC announced the appointment of a new interim board chaired by Dr. Abdullahi Garba. Dr. Abubakar Umar Hashidu was retained as Administrator and Special Director for an initial six-month period to run day-to-day operations.
The regulatory body, in coordination with the African Export-Import Bank (Afreximbank), confirmed it will initiate a 12-month competitive process to recruit a technically and financially competent replacement core investor.
NERC has assured consumers in Kaduna, Kebbi, Sokoto, and Zamfara states that electricity supply will remain uninterrupted during the transition. However, with similar financial pressures building across other DisCos nationwide, stakeholders maintain that unless the Federal Government reforms the macro-economics of the Nigerian Electricity Supply Industry (NESI), regulatory takeovers will remain a recurring nightmare rather than a solution.
