• Friday, June 21, 2024
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Elumelu urges govt to clear N2trn debt to GenCos

Elumelu urges govt to clear N2trn debt to GenCos

…Says it’s time to privatise TCN

Tony Elumelu, chairman, Transcorp Group, on Monday, urged the Federal Government to pay off over N2trn, long-standing debt owed the Generating Companies (GenCos) which is stifling the power sector, among other issues.

Elumelu also called for the privatisation of the Transmission Company of Nigeria (TCN), the only yet-to-be-privatised entity in Nigeria’s power chain – which lacks needed capacity to generate electricity for distribution to end consumers.

Elumelu, who majorly owns two Gencos – Transcorp and Transafam Power, noted that the distortion in the liquidity flow in the sector was huge and typified by the debt owed to GenCos by Nigerian Bulk Electricity Trading Plc (“NBET”), currently over N2 trillion.

“We are owed N250 billion as of March 2024,” he stated, adding that, “Technically, the GenCos are subsidising the sector by continuing to generate power despite the huge debt owed them.”

This, he said, has impacted negatively on GenCos’ ability to pay gas suppliers, thereby impacting the quantity and reliability of gas supply and investment in the generating arm.

Elumelu spoke in Abuja at the Transcorp Plc annual general meeting (AGM), where he raised concerns that inadequate and weak transmission infrastructure, numerous uncompleted transmission projects, inappropriate alignment of transmission projects to distribution needs and manpower development challenges were causing significant transmission challenges and impacting power supply from GenCos to end-users, through power distribution companies (DisCos).

Meanwhile, in 2023, Transcorp Plc grew its market capitalisation by 604 percent from N50 billion at the beginning of 2023 to N577 billion as of the end of March 2024.

But beginning 2023 to date, the group’s combined market capitalisation on the Nigerian Exchange has risen from N114 billion to over N4.4 trillion as of the end of Q1, 2024.

As contained in the company’s financials presented at the meeting, gross earnings in 2023 grew by 47 percent from N134 billion reported in 2022 to N197 billion, while profit before tax increased by 94 percent from N30 billion to N59 billion.

Total assets increased by 20 percent to N530 billion, driven by growth in operating revenue and cash flow.

Shareholders’ funds grew by 21 percent from N155 billion to N187 billion, driven by retained profit for the period. Total liabilities increased by 19 percent, from N288 billion to N343 billion, during the year.