FG to sell Kaduna Electric over N110bn debt
The Nigerian Electricity Regulatory Commission (NERC) has put up for sale the sixth largest power distribution utility over a N110billin ($130 million debt), less than two years after the lenders who took over the company failed to turn it around and make it profitable. Nigeria, has 11 power distribution companies but it is struggling to […]
The Nigerian Electricity Regulatory Commission (NERC) has put up for sale the sixth largest power distribution utility over a N110billin ($130 million debt), less than two years after the lenders who took over the company failed to turn it around and make it profitable.
Nigeria, has 11 power distribution companies but it is struggling to remain profitable because of lack of capital and sub-economic tariffs imposed by the Nigerian Electricity Regulatory Commission (NERC).
Kaduna Electricity Distribution Plc (Kaduna Electric) is one of 18 successor companies created following the privatisation of the defunct Power Holding Company of Nigeria in 2013 and sells electricity in four northern states.
The utility owes N110bn, NERC said in a notice on Monday, to companies including the Nigerian Bulk Electricity Trader and power generation firms.
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The regulator said it now considered the company a ‘failing licensee’, allowing NERC to dissolve its board using a law passed last year.
Kaduna Electric was taken over by African Export-Import Bank (Afreximbank) and local lender Fidelity Bank in July 2022 but they have struggled to improve its financial performance. The Nigerian government through its Bureau of Public Enterprises also owns a 40% stake.
NERC said it had appointed an administrator and special directors to manage Kaduna Electric in the interim and sell its assets to the highest bidder.
It stated that Dr. Umar Abubakar Hashidu is hereby appointed as the administrator of KAEDC in furtherance to 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 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 A. Okoh, Chairman, Kabir Adamu, Sharfuddeen Zubair Mahmoud, John Ayodele and Rahila Thomas.”
It added that 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.”
Meanwhile, Dr. Umar Abubakar Hashidu yesterday resumed office as the Chief Executive Officer of Kaduna Electric.
A statement issued by the Head of Corporate Communication, Abdulazeez Abdullahi, this morning, said a brief handover ceremony presided over by the NERC’s Commissioner for Legal Licensing and Compliance, Dafe Okpaneye, at the company’s corporate headquarters in Kaduna.
At the ceremony, which was followed by a short interaction with staff, Okpaneye thanked the former MD for the work he had put in in the past 18 months to move the company forward. He charged Dr. Hashidu to harness the talent and resources available to him to take Kaduna Electric to greater heights.