- Kaduna Electric has a debt of N110 billion ($130 million) owed to various entities, including the NBET and power generation firms.
- Afreximbank and Fidelity Bank took over Kaduna Electric in 2022, but their efforts to rejuvenate its financial performance have faced significant challenges.
Due to mounting debt, the Nigerian Electricity Regulatory Commission (NERC) is preparing to sell Kaduna Electricity Distribution Plc (Kaduna Electric), the nation’s sixth-largest power distribution utility. This decision comes less than two years after the company’s takeover by lenders failed to revamp its financial health and profitability. According to a report by Reuters, a notice by NERC shows that the electricity distribution company owes various entities a debt of N110 billion ($130 million).
The entities include the Nigerian Bulk Electricity Trading and power generation firms. This prompted NERC to consider the company a ‘failing licensee’ and is invoking a recently passed law to dissolve its board. Kaduna Electric is one of the 18 successor companies formed after privatising the defunct Power Holding Company of Nigeria in 2013. Currently, Kaduna Electric operates in four northern states.
It is worthy of note that, over the years, Nigeria’s power sector has faced many challenges. The 11 power distribution companies in the country find it increasingly difficult to stay profitable due to capital deficiencies and the burden of sub-economic tariffs imposed by NERC. In July 2022, African Export-Import Bank (Afreximbank) and local lender Fidelity Bank took over Kaduna Electric, but their efforts to rejuvenate its financial performance have faced significant challenges.