• Thursday, February 22, 2024
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NERC terminates Kaduna Electric’s board over N110bn debt

NERC terminates Kaduna Electric’s board over N110bn debt

The Nigerian Electricity Regulatory Commission (NERC) has dissolved the board of directors of Kaduna Electricity Distribution Company (KAEDC) due to its failure to settle a debt of N110 billion owed to the Nigerian Electricity Supply Industry (NESI).

The order, dated January 1, 2024, and signed by Sanusi Garba, and Musiliu Oseni, the chairman and vice chairman of the Commission, also mentioned the company’s inability to find a new buyer on time as a reason for the dissolution.

KAEDC was among the five electricity distribution companies (DisCos) that underwent receivership after core investors, unable to repay borrowed funds used for acquisition during privatization in 2013, were taken over by their funders.

Yusuf Yahaya, managing director of the DisCo, resigned from the company last saturday.

According to NERC, KAEDC owed N110 billion to the Nigerian Bulk Electricity Trading (NBET) and Transmission Company of Nigeria (TCN’s) Market Operator (MO) from 2015 until the present.

The order mentioned that the receivership, led by Afrexim Bank, had been given notice to explain why its license should not be canceled, with an additional 30 days granted in July of the previous year.

The bank requested four to six months to finalize the divestment process but could not provide the required bank guarantees for KAEDC’s market obligation.

In addition, the order stated that the company’s failure to secure new owners and meet its financial obligations would result in the removal of its directors.

“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)” NERC, said.

According to the Order, the administrator, acting as the de facto CEO, will manage the day-to-day affairs of the utility until the completion of the sale to a new core investor.

“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 administrator shall work with a team of special directors that shall constitute non-executive directors of the board for governance purposes. The following are hereby appointed as special directors for KAEDC: Alex Okoh, Chairman; Kabir Adamu, Sharfuddeen Zubair Mahmoud, John Ayodele, and Rahila Thomas.”

Meanwhile, the executive management team that shall work with the administrator would be constituted by the commission and announced in due course.

“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 Commission said.