Elumelu calls on FG to pay debts owed GENCOs

Elumelu calls on FG to pay debts owed GENCOs

By Jeffrey Agbo

Chairman of Transnational Corporation (Transcorp) Plc Tony Elumelu has called on the federal government to expedite action on the payment of debts owed to electricity generating companies (GENCOs).

Elumelu spoke at the company’s 19th Annual General Meeting in Abuja on Wednesday.

“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 at date our federal government owes your company over N600 billion ($400 million),” he said.

“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.

“I am aware of some of the well-intended initiatives of the federal government in the power sector. The efforts commenced last year by the new administration, President Tinubu’s administration, targeted at paying the debt owed GENCOs.

“The presidential metering initiative targeted at increasing access to meters, the separation of the independent system operations from TNC to mention but a few.

“While the intentions behind these initiatives are very good, these intentions can only be achieved through ruthless, result oriented and timely execution of the initiatives before this sector collapses in front of our every eye with these attendant consequences.

“Let me therefore use this opportunity of our AGM to call on all those involved in executing our president’s directives on this initiative to please prioritise this critical national task immediately.

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“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 in working with the federal government on this.”

Speaking on the company’s growth, Elumelu said: “Transcorp Group today, the market value of your company’s listed entities is $3billion (N4.5trillion).

“When we took over the company in 2011, the market cap was less than N20 billion, we have grown value together. Your company indeed is growing. Last year, we took Transcorp Ughelli Power public and 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 combined 2,000. But available capacity for the 2; Ughelli is 625 MW and Transafam 305 MW, combined its almost 1,000MW in a country where we consume less than 5,000MW 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. And at our Transcorp Hotel where you are sitting today, we have just completed the 5,000-capacity event centre.

“We believe Nigeria should be able to attract, global international, world-class events and you cannot achieve this if you do not have an event centre that can accommodate a huge number of people.

“Rwanda, Dubai and 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.”

The Transcorp Group chairman said electricity transmission infrastructure whether under the PPI or other initiatives should be addressed immediately and special incentives should be put in place to expedite investment in gas and gas infrastructure development.

He said he believed that the new leadership in the Nigeria National Petroleum Company (NNPC) would help to fast-track this.

“The completion of the ongoing OB3 (Obiafu-Obrikom-Oben) gas pipeline will positively impact gas to power supply as the pipeline is expected to link the Eastern gas network where there is currently acute gas supply shortage; to the western network, with relatively better gas supply availability,” Elumelu added.