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Nigeria Moves to Privatise Struggling Kaduna Electricity Distribution Company Over $130 Million Debt

The Nigerian Electricity Regulatory Commission (NERC) has announced plans to privatise the debt-ridden Kaduna Electricity Distribution Company, the nation’s 6th largest power utility.

Kaduna Electric owes approximately 110 billion naira (around $130 million) to various entities, including the Nigerian Bulk Electricity Trader and multiple power generation companies, according to NERC.

The regulator designated Kaduna Electric as a “failing licensee,” permitting NERC to dissolve the company’s board. This move comes less than 2 years after lenders African Export-Import Bank and Fidelity Bank took over management of the distressed utility.

Privatisation efforts aim to attract new private investment and management to turn around Kaduna Electric’s dire financial situation. Operations span four key northern Nigerian states, serving millions of households and businesses.

Broader electricity access issues plague Africa’s largest economy. Nigeria produces just a fraction of its 12,500 megawatt generation capacity, forcing frequent blackouts and reliance on expensive, polluting generators for power.

Earlier privatisation of state electricity assets in 2013 created successors like Kaduna Electric to improve reliability. But utilities have largely struggled to operate profitably and make needed infrastructure investments due to low government-imposed consumer tariffs.

NERC named an administrator and special directors to oversee operations and sell Kaduna Electric assets to the highest bidder during the transition period. Outcome aims to avoid disruption for customers while increasing efficiency under new private owners.

 

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