NERC Fires KAEDCO Management Over Non-Performance, Appoints New Administrator

From David Onuoja Abuja

NEWSDAILYNIGERIA: Nigerian Electricity Regulatory Commission (NERC) has on Monday fired the Management of Kaduna Electricity Distribution company (KAEDCO), over non performance and immediately appointed Dr Umar Abubakar Hashidu as de facto Chief Executive of the Company till further notice.

In a statement issued by the KAEDCO Head of Corporate Communication, Abdulazeez Abdullahi, said a brief handover ceremony presided over by Mr Dafe Okpaneye, who is the NERC Commissioner for Legal Licensing and Compliance, was held at the company’s corporate headquarters in Kaduna.

Nigerian Electricity Regulatory Commission said, all the former management and board of directors are by this directive dissolved immediately to cushion way for a better hands to take over the affairs and make the power company viable.

NERC added that the change of leadership was due to the failure of the former who did not meet its financial obligations to the Nigerian Bulk Electricity Trading Plc, NBET, and the Market Operator, OP, in contravention of the Electricity Act (EA) 2023.

Speaking further in what it tagged as “Order of Regulatory Intervention in Kaduna Electricity Distribution Plc”, the Nigerian electricity umpire said the Order takes effect from 1 January, 2024 and remains in force until amended or revoked by subsequent Orders issued by it.

According to NERC, ” 9]9it had to act after KAEDCO core investors failed to take advantage of all entreaties to provide bank guarantee.

“KAEDC has consistently failed to meet its obligations to the market in contravention of the EA and the terms and conditions of its electricity distribution licence issued by the Commission.

“The management, board and shareholders of KAEDC have been granted ample opportunities to address the utility’s failing performance at meetings with the Commission; and they have been unable to cure the Utility’s failure.

“KAEDC was issued the statutory 60-day notice to show cause on 15 May 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 Commission granted a 30-day extension, with effect from 20 July 2023, to the management, board and shareholders of KAEDC to provide iustifiable cause in writing and they have been unable to do so.

“The extent of non-performance was further reiterated by a letter dated 31 July 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 4 – 6 months to finalise the divestment process and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.

“As at 1 October 2023, KAEDC owes NBET and MO over NGN110 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.

“KAEDC has fulfilled the requirements for the invocation of the Commission’s powers in failing licensees with the satisfaction of sections 75(3)(a)(b) and (d) of the EA.

“The Commission thereby orders as follows :-
A. 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 EA.

B. Dr Umar Abubakar Hashidu is hereby appointed as the administrator of KAEDC further to section 75 of the EA. He 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”, it said.

It also said that, the administrator is to work with non-executive directors constituted by NERC with Alex Okoh as Chairman, pending when an executive management will be constituted.

Speaking during handing and taking over ceremony, Mr. Okpaneye thanked the former MD for the work he had put 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.

Responding, Dr Hashidu urged every staff member to look in the mirror and challenge themselves to do better.

Stressing that, his belief in the ability of the management and staff to change the narrative about Kaduna electric to a positive one is possible.