The stability of Nigeria’s electricity supply is under severe threat, with Tony Elumelu, Chairman of Transcorp Group, issuing a stark warning that the nation’s power grid could collapse without immediate government intervention. Speaking at Transcorp’s 19th Annual General Meeting in Abuja, Elumelu revealed that the federal government owes his company alone over N600 billion, approximately $400 million, for electricity already generated and supplied to the national grid.
“As of date, our federal government owes your company over N600 billion. That is $400 million,” Elumelu stated, addressing shareholders. “Much as we, as patriotic Nigerian investors, are committed to supporting the effort of the federal government facing the economy, we have another excruciating burden of subsidising the sector as producers who do not get paid for the electricity we generate.”
Elumelu’s urgent call comes amidst persistent power outages and grid instability, issues that have plagued Nigeria’s electricity sector for over a decade since its privatization. The lack of timely payments to Generation Companies (GenCos) has created a crippling liquidity crisis, threatening the sustainability of the entire system.
“We put it on the grid, and it is consumed on the grid,” Elumelu emphasized. “This, you will ask, is totally not sustainable. It requires urgent attention.”
While acknowledging the current administration’s efforts, including the Presidential Metering Initiative (PMI) and the separation of Independent System Operations, Elumelu expressed concern over the slow and uncoordinated implementation. “While the intention behind this initiative is very good, these intentions can only be achieved through ruthless, result-oriented and timely execution before this sector collapses in our very lives,” he warned.
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Elumelu urged the government to expedite debt repayment processes initiated in late 2023 and accelerate the nationwide rollout of meters. He also highlighted the critical need for increased investment in gas infrastructure, citing the OB3 pipeline project as essential for alleviating gas supply constraints that hinder power generation.
“Nigerians need improvement in access to electricity,” Elumelu asserted. “The Transcorp Group alone is owed over $400 million. We want this paid so that we can help actualise the president’s vision for improving electricity supply to Nigeria.”
Despite these challenges, Transcorp’s diversified portfolio, including Transcorp Hotels, Transcorp Power (managed by Abuja Electricity Distribution Company), and Transcorp Energy, has shown strong performance. The group’s listed market capitalization has surged to over N4.5 trillion, a significant increase from less than N20 billion in 2011. Unlisted assets, such as AEDC and Transcorp Energy’s OPL 2SL, are expected to further enhance the group’s value.
The urgency in Elumelu’s message underscores the critical state of Nigeria’s power sector. If the government fails to address the mounting debts and expedite crucial reforms, the consequences could be dire for the nation’s economy and its citizens.
