Nigeria Electricity Regulatory Commission (NERC) has cancelled the licence of Kaduna Electricity Distribution Company and appointed a sole administrator.
The company, according to an order, NERC/2024/00, dated January 1, 2024, is owing the Nigerian Bulk Electricity Trading Company (NBET) and market operator about N110 billion.
This comes as Afreximbank seeks to recoup its investments of over $119 million in the utility.
NERC, in the order signed by chairman of the regulatory body, Garba Sanusi, sacked all directors of the DisCo, led by Yusuf Yahaya, and dissolved the board.
A new Chief Executive Officer, Dr Umar Abubakar Hashidu was immediately appointed and assumed office yesterday.
The regulator said the new administrator would work with a team of special directors to constitute non-executive directors of the board for governance purposes.
NERC stated in the order that Kaduna DisCo consistently failed to meet its obligations and persistently contravened market rules.
Listing series of its engagement and move to address the loopholes, the commission said the management, board and shareholders were given ample opportunities to address the utility’s failing performance albeit unsuccessful.
It explained: “KAEDC was issued the statutory 60-day notice to show cause on May 15, 2023 and the management, board and shareholders were unable to show cause in writing within the specified timeframe as to why the utility’s distribution licence should not be cancelled.
“The extent of non-performance was further reiterated by a letter dated July 31, 2023, from KAEDC’s Chief Finance Officer, where he confirmed unequivocally that the utility was not in a position to comply with the basic market requirement of providing a bank guarantee in favour of NBET in compliance with the market rules and subsisting orders.
“The commission met with Afrexim’s leadership following the expiration of the final 30-day extension, and they confirmed that their transaction advisor would need four to six months to finalise the divestment process, and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.
“As at October 1, 2023, KAEDC owes NBET and MO over N110 billion and stands in the risk of direct receivership if the utility’s continued participation in the electricity market as presently constituted at management, board and shareholder level is allowed to continue without urgent regulatory intervention.”
NERC stated that it would administer sale of the undertaking in accordance with provisions of the Electricity Act based on the highest and best price offered for the utility.
A statement by Head of Corporate Communications of Kaduna DisCo, Abdulazeez Abdullahi, said a brief handover ceremony, presided over by NERC Commissioner for Legal Licensing and Compliance, Dafe Okpaneye, was conducted at the company’s corporate headquarters in Kaduna.
Earlier last Friday, Kaduna Electric had in an internal notice announced the departure of Yusuf Usman Yahaya as Managing Director/Chief Executive Officer of the company, effective January 5. He was appointed in July 2022.
In the circular, the firm appreciated Yahaya for executing impactful programmes that had direct bearing on the people, organisation and enhanced service delivery.
