By Adeniyi Adeoloye
The Nigerian Electricity Regulatory Commission (NERC)’s dissolution of the Kaduna Electricity Distribution Company’s (KAEDC) board on August 10, 2026, is a stark reminder that privatisation is no silver bullet to service improvement when the underlying structural weaknesses of a utility remain unaddressed.
NERC attributed its action to “severe financial insolvency, with KAEDC accumulating over ₦118.6Billion in additional market debt under ASI Engineering Limited by May 2026, bringing total market obligations to approximately ₦456.5 Billion.” The implication of the financial situation translate into real world outcomes, given that distribution companies are customer facing, and responsible for recovering the revenue used to settle every participant in the electricity value chain.
The depth of KAEDC’s operational and financial freefall is unmistakable when contrasted against NERC’s own figures. According to NERC, the utility, KAEDC “remitted only 41.93% of its adjusted market invoices in 2025, recorded Aggregate Technical Commercial and Collection (ATC&C) losses of 71.88%, invested only ₦2.48Billion against a capital requirement of ₦24.51Billion, and maintained customer metering coverage of less than 36%.” These numbers not only paint a picture of a utility in crisis, but also one buckling under its own weight.
“Federal subsidy masks much of the remittance weakness across Nigeria’s electricity distribution companies, with the notable exception of KAEDC, where even subsidy cannot conceal the scale of the shortfall, according to NERC data. Eko, Ikeja and Port Harcourt DisCos are often adjudged top performers with best remittance, but Ikeja Electric received ₦511.45 Billion in NBET invoices and remitted ₦244.09 Billion – 48%, leaving a ₦267.37 Billion shortfall covered by federal subsidy. Eko DisCo remitted ₦218.73 billion against ₦450.65 Billion invoiced – 49%, with ₦231.91 Billion subsidised.
The gap between NBET (Nigerian Bulk Electricity Trading plc) invoices and actual payments remains substantial even among these better‑performing DisCos.”
ATC&C losses are the most consequential metric for assessing a utility’s health, because they capture the utility technical inefficiency, billing gap, billing collection failure and overall system performance. With ATC&C losses at 71.88%, KAEDC effectively earns ₦28.12 for every ₦100 worth of electricity delivered to its network. The severity of this is that, without public financials, it is clear the utility must be struggling to cover overheads, with little room for the capital investment needed to improve its operational and financial state.
Can the change of the board stop this hemorrhaging? Unlikely. A new board may steady the ship, but it cannot turn the corner without deep operational reform and infrastructure investment well beyond the meagre tenth of required capital KAEDC spent per NERC.
While KAEDC is in NERC’s crosshairs today, its operational and financial distress is far from unique. Across the industry, several DisCos exhibit similar troubling fundamentals: high ATC&C losses and persistently low metering coverage.
NERC data shows that ATC&C losses in the year 2025 stood at 61.19% for Yola DisCo, 62.15% for Jos, 44.63% for Kano, 44.29% for Benin, 42.93% for Ibadan, 40.55% for Enugu, 39.60% for Port Harcourt and 33.96% for Abuja. The outliers are Eko and Ikeja with significantly lower losses of 16.13% and 20.22% respectively.
Federal subsidy masks much of the remittance weakness across the DisCos, with the notable exception of KAEDC, where even subsidy cannot conceal the scale of the shortfall, according to NERC data. Eko, Ikeja and Port Harcourt DisCos are often adjudged top performers with perfect remittance. However, the gap between NBET (Nigerian Bulk Electricity Trading plc) invoices and actual payments remains substantial even among the better performing DisCos.
Ikeja Electric received ₦511.45 Billion in NBET invoices and remitted ₦244.09 Billion – 48%, leaving a ₦267.37Billion shortfall covered by federal subsidy. Eko DisCo remitted ₦218.73Billion against ₦450.65 Billion invoiced – 49%, with ₦231.91Billion subsidised. Port Harcourt DisCo paid ₦95.18 Billion out of ₦243.55Billion billed – 39%, requiring ₦148.36Billion in subsidy.
Abuja DisCo received a total invoice of ₦519.06Billion, remitting ₦240.69Billion – 46%, while the federal government covered the short fall of ₦278.37 Billion. Benin Disco paid ₦137.28Billion of its invoice of ₦316.02 Billion – 43%, and the government covering the shortfall of ₦178.74Billion.
Ibadan DisCo remitted ₦162.11Billion out of ₦402.05Billion billed – 40%, leaving ₦239.94Billion unpaid. Enugu DisCo paid ₦117.14 Billion out of ₦283.55Billion billed – 41%, leaving ₦166.42Billion outstanding. Kano DisCo remitted ₦70.24Billion out of ₦188.76Billion billed – 37%, leaving ₦118.52Billion unpaid. Jos DisCo paid ₦65.71Billion of its ₦168.29Billion invoice, – 39% with ₦102.58Billion subsidised. Yola DisCo paid only ₦15.49Billion of its ₦88.89Billion invoice – 17%, leaving a ₦73.40Billion shortfall. The federal government subsidised the sector to the tune of ₦1.928Trillion, translating to about 57% of total invoices in 2025. These figures reveal the depth of structural insolvency across the DisCos, where actual remittances routinely fall below 50% of NBET billing without federal backstop, indicating how exposed the market is if subsidy is removed.
Metering across the DisCos remains a structural weakness. NERC data shows only Eko and Ikeja DisCos have achieved meaningful progress, at 85.87% and 86.40%, leaving gaps of about 13 – 14%. Abuja and Port Harcourt DisCos sit in the mid tier with gaps between 22 – 36%, while Benin, Enugu and Ibadan hover around a 46 – 48% gap. Jos, Kano and Yola recorded metering gaps above 64%. The implication is far reaching – the sector still struggles to determine consumption accurately, a foundational metric that drives ATC&C losses and undermines revenue recovery, despite the various metering initiatives introduced by NERC.
The bottom line is clear: nearly 13 years after privatisation, the DisCos still struggle to deliver the service improvements the reform envisioned. While KAEDC’s board is the one that has recently faced the regulator’s hammer, the operational and financial performance of other DisCos is not materially better, as the remittance and metering data show.
This industry wide distress now intersects with a new regulatory landscape created by the Electricity Act 2023, which ends the era of NERC as the sole regulator and introduces a multi-tiered system where subnational governments now hold full authority over licensing, tariff setting and enforcement within their boundaries, while NERC retains overriding authority in certain jurisdiction.
In a market where DisCos were incorporated as natural monopolies under a single federal regulator, this decentralised framework raises critical questions: does the current corporate structure still make sense in a decentralised, state driven regulatory environment or should utilities be reorganised along state lines? If performance of DisCos remain weak across board, how long should existing investors hold these assets before the privatisation is revisited and more capable investors brought in?
With subsidy removal back on the table and the attendant sunset of federal backstopping, decision makers must now confront the old but unavoidable question over whether electricity in the country can continue to be treated as a social good or must now be priced as a commercial one.
