N110bn debt: NERC dissolves Kaduna DisCo board, appoints new management

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of directors of Kaduna Electricity Distribution Company (KAEDC).

The dissolution followed the DisCo’s inability to pay the N110 billion debt owed to the Nigerian Electricity Supply Industry (NESI), according to a recent order jointly signed by Sanusi Garba, NERC’s chairman, and Musiliu Oseni, his vice.

KAEDC is among the five electricity distribution companies (DisCos) that were restructured by Fidelity Bank Plc, Afreximbank, and Asset Management Corporation of Nigeria (AMCON).

Yusuf Yahaya, the managing director of KAEDC, recently resigned from the company on January 5, 2023 — 18 months after his appointment in July 2022.

Speaking on its action against the board, NERC said the inability of the company’s receivership to get a new buyer of the company on time necessitated the dissolution.

Announcing the dissolution, NERC also said the company owed the Nigerian Bulk Electricity Trading (NBET) and Transmission Company of Nigeria (TCN’s) market operator (MO) the sum of N110 billion from 2015 till date.

The receivership, led by AfreximBank, was given 60 days after the first 30 days in July 2023 to explain why its licence should not be terminated, according to the commission.

Thereafter, the commission said, the bank asked for four to six months to complete the divestment process, adding that the company was unable to provide the bank guarantees needed to secure KAEDC’s market obligations.

According to the order, the directors’ jobs will be at risk if the company is unable to find new owners who would allow it to fulfil its financial obligations.

“All directors of KAEDC are hereby removed from office and the board of directors stands dissolved in the exercise of powers vested in the commission by Section 75 of the Electricity Act (EA),” NAN quoted NERC as saying.

“To this effect, Mr Umar Hashidu is hereby appointed as the administrator of KAEDC in furtherance of section 75 of the EA.

“The administrator shall be the de facto Chief Executive Officer of KAEDC and shall be responsible for the management of the day-to-day affairs of the utility pending the finalisation of the sale of the undertaking to a new core investor.”

The NERC said the administrator shall work with a team of special directors who will serve as the board’s non-executive directors for governance purposes.

NEW APPOINTMENTS

Meanwhile, the agency appointed Umar Abubakar Hashidu as the sole administrator of the utility.

The commission also appointed Alex Okoh as chairman, while Kabir Adamu, Sharfuddeen Mahmoud, John Ayodele, and Rahila Thomas, are non-executive members of the new board.

According to the order, the executive management team will collaborate with the administrator, who will be appointed by NERC and made public when appropriate.