The unbundling and privatisation of the Nigeria’s power sector was meant to create competitive market that attracts private investment, boosts power generation while ensuring reliable and cost-efficient power supply. Transcorp Group’s first investment in the Ughelli Power Plant through Transcorp Power Limited is now in its 10th year. The investment has boosted the national grid, enabling it to power countless homes and industries in Nigeria and West Africa
Despite the hitches that followed power sector privatisation, the exercise has birthed great power companies dominating national and international energy spaces.
These companies have enabled the achievement of some milestones including increase in installed capacity for power generation, expansion of the transmission network, roll out of meters, progress in boosting utility revenues and greater demand for power sector equipment. These have enabled private sector investments and participation across the value chain.
After 10 years of investment in the power sector, Transcorp Group’s first investment in the Ughelli Power Plant through Transcorp Power Limited has provided significant mileage to the national grid.
Transcorp Power Limited (TPL) is a single cycle 972MW installed capacity power generating plant located in Ughelli, Delta State. It is the largest gas-fired power generating station in the country. Our mission is to improve lives, and we are leading the way in energy generation for millions of people in Nigeria and Africa.
Transcorp Power received the certificate of discharge from post-privatisation monitoring, having surpassed all requirements within the stipulated period.
As at November 2023, year-to-date- TPL has sent out 2,857,950.40MWh (357MW on average daily) which represents 8.65 per cent of the energy sent to the National Grid.
Likewise, Transcorp Power Limited had a stellar performance in November 2023 sending out an average of 438MW and was ranked second only behind Egbin. For the year 2023 year-to-date TPL is ranked fourth.
” TPL currently has a generation capacity of 500MW, and can generate enough energy to power 1.6 million homes daily. Since the privatization of the power sector in November 2013, TPL has generated over 29,574,447MWh (29TWh) of energy to the national grid powering countless homes and industries in Nigeria and West Africa. TPL currently has a generation capacity of 500MW and currently generates 426MW on average daily in December,” report from the company said.
Also, the Central Bank of Nigeria, Transmission Company of Nigeria, and power distribution companies will in May next year complete a total of 53 power projects worth N122 billion currently under construction across the country.
When completed, over 1,000 megawatts would be added to the firm’s wheeling capacity.
Industry sources indicate that due to rapid population growth, Nigeria will need substantial additional generation capacity to meet demands through 2030. They foresee opportunities in distributed power generation, smart grids, and energy storage in the medium to long-term.
Investment/ expansion programmes
Transcorp Group recently acquired a 60 per cent stake in the Abuja Electricity Distribution Company (AEDC), strategically fortifying its presence in the region. The acquisition perfectly aligns with Transcorp Group’s vision to empower Africa and catalyse the expansion of the continent’s industrial landscape.
Under Transcorp Group Chairman, Tony Elumelu, the conglomerate’s market capitalisation rose significantly, providing the financial muscle to make electricity accessible to Nigeria and Africa’s teeming population.
Elumelu is Africa’s billionaire businessman, renowned philanthropist and chief promoter of Africapitalism. His passion for powering Africa has been on for decades. He believes that the next big challenge for Africa would be tackling the lack of electricity, and Transcorp has been energised with the right leadership and capital to bridge power supply gaps in the continent.
Transcorp Group, through a consortium, acquired 60 per cent stake in Abuja Electricity Distribution Company (AEDC) and engineered management changes. Transcorp Power Managing Director/CEO, Christopher Ezeafulukwe, was appointed by the board of the Abuja Electricity Distribution Company (AEDC), as the new Managing Director/CEO of AEDC. Current CEO of Transcorp Energy, Peter Ikenga, succeeds Ezeafulukwe as Managing Director of Transcorp Power. Elumelu used the portfolio realignment to further consolidate Transcorp’s position within the continent’s power space and energise its economic growth with steady power supply.
The World Bank says solving Nigeria’s power problem will offer the nation an opportunity to tackle long-standing challenges and boost the economy. The lack of reliable power is a significant constraint for citizens and businesses, resulting in annual economic losses estimated at $29 billion, which is equivalent to about two percent of Gross Domestic Product. Aside Nigeria, West Africa has one of the lowest electrification rates, with 220 million people living without access, coupled with some of the highest electricity costs in Sub-Saharan Africa.
President, Africa Development Bank Group, Dr. Akinwumi Adesina, speaking at a Lagos forum, said major challenge facing the industry in Nigeria is the very high cost coupled with unreliability of supply of electricity. “Load shedding and unreliable power have made the cost of manufacturing extremely high and uncompetitive. Most of the manufacturing companies self-provide energy through a reliance on cost-prohibitive generators and diesel and heavy fuel oil. The polluting emissions make them brown industries, not green industries,” he said.
Adesina said that unless Nigeria decisively tackles its energy deficiency and reliability, its industries will remain uncompetitive. On the way out, he said: “There should be massive investments in gas to provide power and to ensure stable base load power for industries, hydropower resources, large-scale solar systems, direct power preferentially to industries, and to support industrial mini grids that concentrate power in industrial zones. In addition, we should develop more efficient utilities, reducing technical and non-technical losses in power generation, transmission, and distribution systems.”
Former Vice President, Prof. Yemi Osinbajo, during the inauguration of Transafam’s 240 megawatts Afam 3-Fast Power Plant, Oyinbo, Rivers State, said Transcorp Corporation Plc, has through its subsidiaries in the power sector – Transcorp Power Plc and Transafam Power Plc – boosted power supply in the country. Transcorp’s power subsidiaries have the capacity to produce about 1,938MW of electricity, including the 966MW from its plant in Afam, Rivers State, and 972MW from its Ughelli plant in Delta State, accounting for 15.5 per cent of the total installed capacity in Nigeria.
The results of the investments and general inputs made by the Transcorp Group in the power sector led the Federal Government, through the National Council on Privatisation (NCP), to present post-privatisation Discharge Certificate to Transcorp Power Plc, the owner of Ughelli Power Plant in Delta State. The Discharge Certificate marked the delisting of Transcorp Power from the routine evaluation and monitoring of the Bureau of Public Enterprises (BPE), signaling a major achievement for the company. This followed the fulfillment of all privatisation conditions set by the NCP, by Transcorp Power, owned by Elumelu, after the purchase of the power plant in 2013.
Osinbajo commended Elumelu and his Transcorp Group for ensuring compliance and surpassing expectations with all post-privatisation deliverables. Osinbajo said, “Post privatisation monitoring is an important aspect of the federal government’s privatisation programme. Transcorp Power has been able to ensure compliance and surpassed expectations with all post privatisation deliverables. I commend Tony Elumelu and his Transcorp team for this feat. I urge Transcorp Group to continue in that path and even do better.”
The Bureau of Public Enterprises (BPE) noted that Transcorp has met and exceeded the performance targets and all other covenanted obligations agreed during the signing of the privatisation agreement in 2013. “Transcorp Power increased the generation capacity of the plant by 227 per cent from the operational status as at handover in 2013,? it said. According to the agency, “a capital expenditure totaling N58.612 billion was covenanted for phase 1, phase 2 as ‘additional investment’ but the actual investment made by Transcorp was the sum of N83.85 billion, leading up to a score of 143 per cent.”
More investment windows unfold
Elumelu had promised to invest massively in the power sector to help Nigeria’s industrialisation through enhanced access to electricity and ultimately tackle poverty in the country and continent. He said in addition to fulfilling the post-privatisation performance criteria, Transcorp has driven a strong indigenous agenda, saying their plants were being managed and fully operated by Nigerians, hence creating jobs and reducing unemployment in the country.
“For us as Heirs Holdings Group, for us as Transcorp Group, we believe in improved access to electricity because we know that improved access to electricity means powering our schools, helping hospitals to function very well, helping businesses to grow and create employment and most importantly, helping to industrialise Nigeria. So because of this, we invest in the power sector and we will continue to even invest more in that sector because in line with our philosophy of Africapitalism, we cannot develop Nigeria, Africa without improvement in our access to electricity,” he said.
Continuing, he said the best investment that private sector can make is in power to uplift the people out of poverty, create jobs and get women involved in economic activities. He also reiterated the Transcorp Group’s “strong indigenisation agenda” and expressed the group’s pride having Nigerians managing and operating the plants, which is helping in job creation for Nigerians.
Elumelu further said, “But beyond job creation is improving the expertise of our people. We also have operated under very strict safety standards. We have operated since 2013 -10 years now. No incident, no health hazard, nothing and we will continue to stay that way because we know that in 21st century, sustainability is key. Health is important; safety extremely important.
How it all started
In 2013, the Federal Government privatized 11 electricity distribution companies (DISCOs) and six generating companies (GENCOs) while retaining 100 per cent ownership of the Transmission Company of Nigeria (TCN) as part of a wider strategy to reform the sector and stimulate growth.
The country’s ongoing comprehensive power sector reforms are aimed at expanding capacity, increasing electricity access, and upgrading transmission.
Nigeria generates most of its power through thermal and hydro, with installed capacity of about 12,522 MW. The country is part of the Economic Community of West African States and part of the West African Power Pool (WAPP), a specialized agency of Economic Community of West African States (ECOWAS) that includes 14 countries in the regional economic community.
Way forward by stakeholders
In its reflections on Nigeria’s power sector privatization, the Centre for the Study of the Economies of Africa (CSEA) advised that to ensure sustainability and minimize debt accumulation across the value chain, Nigeria may need to implement a true cost-reflective tariff to encourage more efficient service delivery and enable cost recovery for the investors in the sector.
The group advised that some government shares could be sold to raise capital and take steps to attract new investors.
“There is need to bolster the distribution network by expanding metering, completing customer and asset enumeration, and conducting energy demand studies.Reform the gas sector by adjusting gas prices to be cost-reflective, clearing outstanding debts to suppliers, signing pending supply and transportation agreement, and reinforcing risk mitigation requirements and gas supply commitments,” it advised.
