Victor EzejaChairman of Transnational Corporation (Transcorp Plc), Mr Tony Elumelu, has appealed to the Nigerian government to expedite action to fully pay the huge debt owed power generation companies (GenCos).
He said GenCos are reeling under the heavy burden of subsiding the power sector as producers, adding that it is not sustainable and requires urgent attention.
Join our WhatsApp ChannelElumelu stated this during the Annual General Meeting of the company held in Abuja on Wednesday.
He said the Federal Government is currently owing Transcorp Power (one of the subsidiaries of Transcorp Group) N600 billion ($400 million).
Elumelu, who noted that access to electricity remains the most critical factor in fixing the Nigerian economy, stressed the need for fixing the power sector to transform the country.
He lamented that the dominant challenges of liquidity, infrastructure, and gas availability have remained unresolved 12 years after they invested heavily in the sector.
He said: “I want to use this opportunity to reiterate that access to electricity remains the single most critical factor in fixing the Nigerian economy, especially as we seek to have the non-oil sector make a greater contribution to our economy.
“The main dominant challenges of the power sector, namely, liquidity infrastructure, gas availability, remain unresolved 12 years after some of us invested heavily in this sector. As of today, our federal government owes your company over N600 billion ($400 million).
“Much as we as patriotic Nigerian investors, are committed to supporting the efforts of the Federal government in fixing the Nigerian economy, we have been under excruciating burden of subsidising the sector as producers who do not get paid for the electricity we generate; we put on the grid and is consumed on the grid.
“This you will agree is totally not sustainable, it requires urgent attention.”
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Elumelu acknowledged the initiatives of the federal government in the power sector such as the efforts to pay the debts owed GenCos, the presidential metering initiative targeted at increasing access to meters, and the separation of the independent system operations from TCN among others.
He, however, stated that while the intentions behind these initiatives are very good, they can only be achieved through a result-oriented approach and timely execution of the initiatives before the power sector totally collapses with its attendant consequences.
The entrepreneur therefore appealed to all those involved in executing the president’s directives on the initiatives to prioritise this critical national task and give it urgent attention.
“They should expedite action to fully pay the huge debt owed GENCOs by completing the process already initiated towards the end of last year.
“The delivery of meters under PMI should be quickened; our group is more committed to working with the federal government on this,” Elumelu stated.
He urged the Federal Government to urgently address the issue with transmission infrastructure by adopting any veritable initiative, adding that special incentives should be put in place to expedite investment in gas and gas infrastructure development to boost activities in the power sector.
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While expressing optimism that the new leadership in NNPC will help to fast track the initiatives, Elumelu stressed that the completion of the ongoing OB3 (Obiafu-Obrikom-Oben) gas pipeline will positively impact gas production and for Power supply as the pipeline is expected to link the Eastern gas network where there is acute shortage of gas supply currently; and also, to the western network, with relatively better gas supply availability gas availability.
Elumelu highlighted the achievements of Transcorp Group in terms of growth and expansion, net worth, and delivery of services.
According to him, the market value of the company’s listed entities is $3 billion (N4.5 trillion).
He said that since taking over the company in 2011, the market cap, which was less than N20 billion, has grown significantly in value over the years.
He revealed that after listing Transcorp Ughelli Power last year, the value today is in excess of N2.7 trillion.
When we say Transcorp is about improving lives and transforming Nigeria and Africa, it is based on the role we play in catalysing development. Power is critical for the development of every economy.
“Transcorp Power Ughelli has the installed capacity of 1,000 MW of electricity generation, and Transafam has 1,000 MW capacity. That is a combined 2,000.
“But available capacity for the 2; Ughelli is 625 MW and Transafam 305 MW, combined it’s almost 1,000 MW in a country where we consume less than 5,000 MW, you can now imagine what your company is contributing to the economy.
“Despite the challenging economic climate, one of our subsidiaries, Transcorp Power, has fully repaid the $215m loan it took in 2014 for the acquisition of Transcorp Power Ughelli.”
He also stated that the Group has completed the 5,000-capacity event centre at Transcorp Hotel, Abuja, pointing out that with such a facility that can accommodate a huge number of people, Nigeria should be able to attract international and world-class events.
“Rwanda, Dubai a,nd even Kenya have become hubs for events, so we want to put your country on that map, and we have succeeded in doing so, and the Transcorp event centre is now open, and people are booking to use the facility,” Elumelu added.
Transcorp Group is one of Africa’s leading, listed companies, with investments in the power, hospitality, and energy sectors.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
