Breaking: FG to Sell Kaduna Electricity Distribution Company (KAEDCO), Reason Revealed
Monday 8 January 2024
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In a significant development, Nigeria's sixth-largest power distribution utility, Kaduna Electricity Distribution Company (KAEDCO), is facing the imminent threat of being sold by the Federal Government due to its staggering ₦110 billion ($130 million) debt. This decision follows a failed attempt by lenders to revive the company's financial health and profitability in the last two years.
A notice issued by the Nigerian Electricity Regulatory Commission (NERC) highlighted KAEDCO's substantial debt owed to various entities, including the Nigerian Bulk Electricity Trader and power generation firms. The mounting financial challenges have led the regulator to label the company a 'failing licensee,' prompting the invocation of a recently passed law to dissolve its board. CONTINUE READING.....
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Despite efforts to rejuvenate KAEDCO's financial performance by African Export-Import Bank (Afreximbank) and local lender Fidelity Bank, challenges persist. The Nigerian government, retaining a 40% stake in the company through the Bureau of Public Enterprises (BPE), had earlier announced plans to divest the remaining 40% government stake in electricity distribution companies (discos) and four other assets in 2024.
Aligned with the government's strategy to generate revenue, reduce fiscal burdens, and attract increased investor participation, this move aims to address the financial struggles within Nigeria's power sector. The government's broader privatization initiative for 2024 seeks to generate ₦298.4 billion in revenue, providing a potential solution to public debts while fostering macroeconomic growth and encouraging investor engagement. CONTINUE READING.....
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