The Nigerian Electricity Regulatory Commission has taken over Kaduna Electricity Distribution Company, dissolving its board of directors due to a mounting debt crisis. The utility owes approximately N456.5 billion in cumulative market obligations as of May 31, 2026.
The regulatory intervention was announced in an order issued on August 10, 2026. NERC stated the decision was necessary to preserve the utility as a going concern and ensure the continuity of electricity distribution services across the franchise area.
The takeover follows persistent market defaults, weak collections, high technical and commercial losses, and the failure of the core investor to provide a credible recovery plan. Core investor ASI Engineering Limited, which took operational control in June 2024, failed to provide acceptable payment guarantees required under electricity market rules.
Breakdown of the N456.5 Billion Debt Burden
The financial position of Kaduna DisCo deteriorated sharply, with its cumulative market obligations reaching N456.5 billion by late May 2026. This debt comprises N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc and N41 billion owed to the Nigerian Independent System Operator.
Additionally, the utility owes N14.26 billion in other statutory and third-party obligations. Under the management of ASI Engineering Limited, the company accumulated an additional N118.6 billion in market debt between June 2024 and May 2026.
During the review period ending December 31, 2025, Kaduna DisCo paid only 41.93% of its adjusted market invoices. This resulted in a market payment shortfall of N46.71 billion for the period.
Operational Failures and High Energy Losses
The regulator linked the weak remittance performance to the company's high Aggregate Technical, Commercial and Collection losses, which stood at 71.88%. This level of loss meant the utility accounted for only 28.2% of the electricity it received and delivered to customers during the 2025 review period.
This regulatory action follows a history of financial and operational disputes. In July 2024, NERC approved the acquisition of a 60% equity stake in the utility by ASI Engineering Limited.
By August 2024, the Kaduna State Internal Revenue Service sealed the company's office over unpaid tax liabilities of about N600 million. In the same month, Kaduna DisCo disconnected the Kaduna State Government House over an outstanding electricity debt of N2.9 billion.
Interim Management and Search for New Investor
Invoking its powers under sections 75 to 79 of the Electricity Act, NERC has dissolved the board of directors to stabilize operations. The commission has appointed special directors to serve as an interim board to oversee the utility's affairs.
The current Managing Director will be retained as an Administrator for an initial six-month period. NERC has also withdrawn key regulatory approvals previously granted to the executive management team.
Over the next 12 months, NERC will supervise a transparent process to secure a technically competent and financially capable replacement core investor to take over the utility.
