The Nigerian Electricity Regulatory Commission (NERC) has extended its threat to cancel the licence of Kaduna Electricity Distribution Company (KAEDCO) for another 30 days to fashion out ways to settle its N51bn underpayment to the Nigerian Electricity Supply Industry (NESI).
NERC, in an advertorial signed by one of its commissioners, Dafe Akpeneye, dated July 19, stated that core investors of KAEDCO, Afrexim Bank and Fidelity Bank, did not give a satisfactory note on ways to sustain the financial viability of the company.
Recall that the regulator had in May given the company a 60 days’ notice to explain why it needs to exist in the electricity market.
But the advertorial stated at the meeting, the representatives of the Disco made several proposals, which include receiver of interest to purchase 60 per cent of the equity holding of the company among others.
The Disco had requested for three to six months to finalise the deal including the provision of N2bn stabilisation fund to further reduce KAEDC’s monthly market shortfall of N4.3bn by N250m in the short term.
The commission however stated that the proposal failed to address concerns about the Disco’s financial sustainability and the systemic risk that it poses to the electricity market.
“The commission resolves that license cancellation notice issued on 15 May 2023 is hereby extended for a final period of 30 days with effect from 20th July 2023, failing which the commission shall exercise its powers conferred by the Electricity Act where the core investors are unable to provide reasonable and sufficient justification for remaining as a market participant.”
It added that it received a request for ‘No Objection’ confirmation from Receiver Manager appointed by Fidelity Bank for the acquisition of 60 percent equity holding in Kano Electricity Distribution (KEDCO) by Powercom Smart grid Nigeria Limited (PSGN) via a letter dated 27 June 2023 and the PSNL indicated an interest to acquire 60 percent equity holdings in KAEDCO.
Meanwhile, PSGN in a statement announcing its takeover of KEDCO stated that the acquisition presents a significant opportunity for KEDCO to implement a comprehensive turnaround plan aimed at improving performance and efficiency.
It said its strategic approach to address the challenges faced by KEDCO would transform it into a highly efficient and financially viable electricity distribution company supporting five million customers.
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