Elumelu calls for complete power sector privatisation

The Chairman of Translational Group (Transcorp) Plc., Tony Elumelu, has called for the total privatisation of the power sector to improve efficiency and innovation in the sector.

Elumelu who spoke on Monday at the Annual General Meeting (AGM) of the company in Abuja also called on the federal government to clear the debts owed Generating Companies (GenCos) by the federal government to avoid total collapse.

He said “There is an urgent need for completion of private sector privatisation, because since 2013 when it started, it has only been partially privatised. TCN is owned 100 per cent by the federal government and the federal government also has a 40 per cent stake in DisCos and because of that they also have shareholders’ interest.

“Therefore, I recommend that FG should come with a clear timeline for privatisation of the private sector starting with the TCN.”

Speaking on liquidity challenges in the sector, he said, “The distortion in the liquidity flow in the sector is huge and typified by the debt owed to GenCos by Nigerian Bulk Electricity Trading Plc (“NBET”), currently in excess of N2 trillion. We are owed N250 billion as at March 2024. 

“Technically, the GenCos are subsidising the sector by continuing to generate power despite the huge debts owed them. This, obviously, has impacted negatively on the ability of the GenCos to pay their gas suppliers, thereby impacting the quantity and reliability of gas supply to the GenCos, as well as investment in generation. I therefore welcome recent pronouncements by the Federal Government of Nigeria affirming its commitment towards paying the debt owed to the GenCos.”

The chairman continued by saying that the “Transcorp Group market capitalisation on the stock exchange has increased from 114bn in January 2023 to 4.4 trillion as we speak which is unprecedented in the history of any company.”

Also speaking, Owen D. Omogiafo, President and Group CEO of Transcorp Said, “Gross earnings in 2023 amounted to N197 billion, compared to N134 billion in 2022. representing a growth rate of 47% year on year. The significant increase was driven by improved performance in our power and hospitality businesses contributing 79% and 21% respectively to the gross revenue,”

The Transcorp Group at the end of the AGM proposed a 10 kobo per share dividend to shareholders.