The Nigerian Electricity Regulatory Commission (NERC) has initiated the process of selling Kaduna Electric Distribution Plc (Kaduna Electric) as the company faces a mounting debt of N110 billion ($130 million). Kaduna Electric, the sixth-largest power distribution company in the country, has struggled financially, despite efforts to turn it around after lenders took over two years ago.
Created from the 2013 privatization of the Power Holding Company of Nigeria, Kaduna Electric serves four northern states. However, financial challenges, coupled with sub-economic tariffs set by NERC, have hindered the profitability of the entire power distribution sector in Nigeria.
Under the new law passed last year, NERC labeled Kaduna Electric a “failing licensee” and dissolved the company’s board. The regulatory body appointed an administrator and special directors to manage the company temporarily. The N110 billion debt is owed to entities like the Nigerian Bulk Electricity Trader and power generation firms.
The administrator will act as the de facto CEO of Kaduna Electric, overseeing the day-to-day affairs until the sale of the company to a new core investor is finalized. A team of special directors has also been appointed for governance purposes.
The NERC stated, “The Commission shall administer the sale of the undertaking in accordance with the provisions of the EA on the basis of the highest and best price offered for the undertaking.” The executive management team that will work with the administrator will be constituted by the commission and announced at a later date.
