Elumelu chides FG’s agencies in frustrating power sector for years
Featuring in CNBC Africa recently, astute banker, current chairman of Transcorp Group and United Bank for Africa (UBA), Tony Elumelu has described Nigeria’s electricity industry as grossly disappointing.
He was quick to trace the undoing of the sector to the excesses of government agencies involved in the industry after all.
He pointed out in anger that debts in the sector are killing the spirit of investment, stressing that “Transcorp Power Holdings is owed almost N50 billion”.
“When we put in the invoice for this month, we should be owed almost N54 or N55 billion. How do you survive in business like this? How? Other GenCos I know are actually dying.
“We are struggling because of our diversified resource base, what of others? Something urgent and drastic must be done. It is as urgent as yesterday.
“The truth is Transcorp power, as a key operator in the sector, is struggling. And if we are struggling, you can imagine what others are going through.”
While decrying the impacts of delays by the government in paying debts, he called on the government to allow power firms generate their own gas, revealing that even “where we are located, we are sitting on a lot of gas”.
Explaining more on debt profile, Elumelu noted that government started owing Transcorp when a dollar was N168, but may now pay back (in naira) when the dollar goes for 300 to N500, a massive depletion of value to shareholders.
He said “Now you put in an invoice and you get paid 15-20%. And they started owing us when the naira was N168 to the dollar. Today, it’s N300 officially and N500 on the black market to the dollar so imagine the depletion, the erosion of value to shareholders of Transcorp.
“Is that going to encourage more investment in the sector? How? We are all living on borrowed time.”
