Africa's biggest economy, Nigeria, has 11 power distribution
companies but they are 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 110 billion naira ($130 million), NERC said
in a notice on Monday, to companies including the Nigerian Bulk Electricity
Trader and power generation firms. 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.
Nigeria, Africa's most populous nation of more than 200
million people, produces a fraction of its installed power generation capacity
of 12,500 megawatts, leaving millions of households and businesses reliant on
private generators for electricity.
Reuters