Transcorp Nigeria Plc has announced that it will invest $2.5 billion in Nigeria’s power sector. The firm revealed it will make the investment through one of its subsidiaries, Transcorp Power.
The Chairman of Transcorp’s Board, Mr Tony Elumelu, who reiterated the Group’s commitment to the Nigerian power sector, said so far, Transcorp Power has injected about $1 billion in projects that have a combined capacity of 700MW.
Elumelu said Transcorp Power submitted a bid for Afam Electricity Generation Co., which operates a natural-gas fired power generation plant in southern Rivers state, earlier this month.
According to the Bureau of Public Enterprise (BPE), two other offers were also made on the Rivers-based electricity company. If Transcorp Power eventually acquires the facility, it would add 700MW to the firm’s power portfolio.
Elumelu said “we’ve expressed interest in the acquisition of Afam Power Plant, which we’re going to spend a lot of money on. It’ll give us 1,400MW and we can do more”. He however lamented the fact that the Nigerian electricity sector is replete with debt, disclosing that Transcorp Power is owed as much as 90 billion naira ($250 million).
The Chairman said “if they’re owing you that kind of money, it affects your ability to do more and more importantly, slows your enthusiasm”.
As at January 2018, a report from Spectator Index, ranked Nigeria as the second worst country in power supply. Power for All, an international organisation also said that no fewer than 93 million Nigerians lacked access to electricity,
The inconsistent power supply has been a major bane to businesses in Nigeria. The problem affects both established businesses and small-scale businesses. As a result, many companies have either closed shop or relocated their production bases to other African countries with more reliable power supply, in a bid to maximise production cost and efficiency.
In September 2012 during the privatisation of Nigeria’s national power assets, Transcorp Nigeria Plc won the bid for the Federal Government of Nigeria’s distressed power generating company, Ughelli Power Plc, operator of Ughelli Power Plant. The $300 million investment was part of Heirs Holdings’ strategic commitment to USAID’s Power Africa initiative.
Transcorp Power Limited was created in November 2015 when Transcorp Ughelli Power Limited and Ughelli Power Plc merged. The merger harmonized the management and operations of Transcorp’s power business for greater efficiency.