The Nigerian power sector is set to receive a major boost, as Transcorp Nigeria Plc disclosed its plans to inject $2.5 billion in the sector. Transcorp Nigeria Plc will make the investment through one of its subsidiaries, Transcorp Power.
Reiterating the Group’s commitment to the Nigerian power sector, the Chairman of Board, Mr Tony Elumelu, disclosed that Transcorp Power has so far injected about $1 billion in projects that have a combined capacity of 700Mw.
According to him, Transcorp Power submitted a bid for Afam Electricity Generation Co. earlier this month. Afam Electricity operates a natural-gas fired power generation plant in southern Rivers state.
Two other offers were, however, made on the Rivers-based electricity company, according to the Bureau of Public Enterprise (BPE). If Transcorp Power eventually acquires the facility, it would add 700Mw to the firm’s power portfolio.
“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.” -elumelu
However, Mr Elumelu lamented the fact that the Nigerian electricity sector is replete with debt, disclosing that Transcorp Power is owed as much as N90 billion ($250 million).
Why Transcorp’s investment is crucial
A report from Spectator Index, as at January 2018, ranked Nigeria as the second worst country in power supply.
An international organisation, Power for All, also said that no fewer than 93 million Nigerians lacked access to electricity.
The epileptic power supply has been a major bane to businesses in Nigeria. The problem affects both established businesses and small-scale businesses.
Consequently, so 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. This has ultimately had various negative impacts on the Nigerian economy.
Transcorps’ power background
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.
In November 2015, Transcorp Ughelli Power Limited and Ughelli Power Plc merged, and Transcorp Power Limited was born. The merger harmonized the management and operations of Transcorp’s power business for greater efficiency.