N110 BILLION DEBT: AS THE NEW CEO TAKES OFFICE, FG MOVES TO SELL KADUNA ELECTRIC.

Babatunji Wusu –

Yesterday, January 8, 2024, marked the official start of Umar Abubakar Hashidu’s tenure as Kaduna Electric’s new CEO.

A brief handover ceremony was held at the company’s corporate headquarters in Kaduna, as confirmed by a statement issued on Tuesday morning by Abdulazeez Abdullahi, Head of Corporate Communication.

Dafe Okpaneye, the Nigerian Electricity Regulatory Commission’s (NERC) Commissioner for Legal Licensing and Compliance, is said to have presided over the event.

After the event, Okpaneye thanked the outgoing Managing Director for his committed work in propelling the business forward during the previous 18 months.

He asked Dr. Hashidu to make the most of the talent and assets at Kaduna Electric in order to take the company to even higher heights.

Selling Kaduna Electricity

In light of the most recent events, the Federal Government—through the NERC—is considering selling the sixth-largest power distribution utility, which is facing financial difficulties due to its N110 billion ($130 million) debt.

After the company failed to turn a profit under the administration of lenders who took over the business less than two years ago, the decision was taken.

There are currently 11 electricity distribution businesses in Nigeria, however many of them struggle to stay in business because of NERC’s sub-economic pricing and a lack of cash.

Following the 2013 privatization of the former Power Holding Company of Nigeria, 18 successor businesses were formed, including Kaduna Electricity Distribution Plc (Kaduna Electric). It sells power to customers in four northern states.

The Nigerian Bulk Electricity Trader and power producing companies are among the businesses to whom the utility owes N110 billion, according to NERC. Given this, NERC has designated the business as a “failing licensee” and, in accordance with a law enacted last year, it is authorized to dissolve the board.

Kaduna Electric was taken over by the African Export-Import Bank (Afreximbank) and local lender Fidelity Bank in July 2022. They have, however, encountered difficulties in their attempts to improve its financial performance.

Furthermore, the corporation is 40% owned by the Nigerian government through the Bureau of Public Enterprises.