Tony Elumelu, Chairman of Transnational Corporation (Transcorp) Plc., has called for the complete privatisation of Nigeria’s power sector to enhance efficiency and foster innovation. Speaking at the company’s Annual General Meeting (AGM) in Abuja on Monday, Elumelu also urged the federal government to settle the debts owed to Generating Companies (GenCos) to prevent a sector collapse.
Elumelu highlighted the necessity of completing the privatisation process that began in 2013 but remains incomplete. He pointed out that the Transmission Company of Nigeria (TCN) is entirely owned by the federal government, which also holds a 40% stake in Distribution Companies (DisCos), thus maintaining significant shareholders’ interest.
“There is an urgent need to fully privatise the power sector. Since 2013, it has only been partially privatised. TCN is fully owned by the federal government, which also has a 40% stake in DisCos. Therefore, I recommend that the federal government establish a clear timeline for the privatisation of the power sector, starting with the TCN,” Elumelu stated.
Addressing liquidity issues within the sector, Elumelu emphasized the substantial debt owed to GenCos by Nigerian Bulk Electricity Trading Plc (NBET), exceeding N2 trillion, with Transcorp alone being owed N250 billion as of March 2024. He noted that this debt burden has forced GenCos to effectively subsidize the sector by continuing power generation despite not receiving payments.
“The liquidity distortion in the sector is severe, exemplified by the debt owed to GenCos by NBET, currently over N2 trillion. Transcorp is owed N250 billion as of March 2024. This situation has negatively affected the GenCos’ capacity to pay their gas suppliers, impacting the reliability and quantity of gas supply and investments in power generation. I welcome the recent commitments from the Federal Government of Nigeria to address these debts,” he added.
Elumelu also remarked on Transcorp Group’s remarkable market capitalisation growth, which surged from N114 billion in January 2023 to N4.4 trillion, an unprecedented achievement in the company’s history.
Owen D. Omogiafo, President and Group CEO of Transcorp, highlighted the company’s financial performance, noting that gross earnings in 2023 reached N197 billion, up from N134 billion in 2022, marking a 47% year-on-year growth. This increase was driven by strong performances in their power and hospitality businesses, contributing 79% and 21% respectively to the gross revenue.
Concluding the AGM, Transcorp Group proposed a 10 kobo per share dividend to its shareholders.
