Post Views: 172 • Says Invested Over $1bn To Fix Power Challenges Tony Elumelu, chairman of Transnational Corporation of Nigeria (Transcorp) and the U...
• Says Invested Over $1bn To Fix Power Challenges
Tony Elumelu, chairman of Transnational Corporation of Nigeria (Transcorp) and the United Bank for Africa Plc, on Tuesday in Abuja lamented the lingering problems of the nation’s power sector, three years after it was privatized by the Federal Government.
Speaking at a two-day stakeholders’ interactive dialogue/workshop on the Nigerian power sector for the National Assembly, Elumelu said the current forex situation in Nigeria has led to huge exchange losses for power generating companies, following which Transcorp’s power subsidiary.
According to him, Transcorp suffered exchange rate losses of N22.5 billion, broken into N6 billion and N18.5 billion respectively in its 2015 and 2016 financial years respectively.
“These are huge losses to shareholders of Transcorp are bad for our economy,” he added, noting that such losses are reasons why “power generation companies are presently unable to meet critical capital and operational expenditure requirements as at date, following the default of the National Bulk Electricity Trader “to pay for electricity produced and sold to it by the power generating companies, all power generating companies are now in serious default of their loan service obligations thereby resulting in extreme pressures being exerted on them. This could have deleterious ripple effect on the system.
“Instructively, as at the time NBET started defaulting in its payment obligations to Transcorp Power Limited, the exchange rate of the Naira to United States Dollar was N168/1$.
“Given the near-consistent fall in the value of Naira, culminating in the current exchange rate of approximately N500/$1 (parallel market), the value of Naira that is owed by NBET has been devalued to a third.”
Speaking on “Power – the most critical transformation agenda for Nigeria,” Elumelu decried the situation where stakeholders rather than fix the problem, seem “to be playing politics with this critical work in the power sector. All stakeholders have a role to play here. We must stop the blame game: Federal Government, legislature, judiciary, regulators and private sector players.”
He warned that stakeholders must fix the nation’s power issues, otherwise “we will have wasted yet another generation. The single most critical transformation agenda for our country is power. We fix power, we fix Nigeria. Anything short is paying lip service.”
Without any nudging, Elumelu said he led “Transcorp Power to key, with unrivalled passion, into the President’s declaration of intention to achieve the generation of a minimum of 10,000 megawatts (MW) of electricity. Buoyed by our accomplished feat of increasing Ughelli Power Plant’s generating capacity from 160MW to an all-time high of 634MW in less than two years, we set for ourselves an ambitious but realizable target of increasing the capacity of our power generation plant from 650MW to 2,500 MW before 2018.
“We do try, but the system appears to be pulling in the opposite direction. If we do not fix the issues affecting the power sector, we will have wasted yet another century as a country and posterity will not forgive us all as stakeholders.
Commending the National Assembly for the initiative to enable stakeholders discuss the issues in the power sector objectively and freely, he urged all participants to use the opportunity to discuss objectively and forthrightly about their concerns.
There have been too many talk shops already, following which “it is time to get moving and doing. I hope this is the last session on power because we are beginning to rehash what we already know. After speaking we must move to execution.
“Our country is currently undergoing one of the toughest economic recessions in recent history. All hands must be on deck to revive the economy and fast-track our journey to recovery.”
The key question participants must answer truthfully, Elumelu said is “how do we grow our way out of the current challenge in such a manner that there is no repeat of another commodity shock?
“The answer is straightforward – we cannot eliminate our vulnerability to commodity swings of boom and bust and move to a new sustainable growth trajectory without diversification.
“I am completely aligned with the current administration on the diversification issue. President Muhammadu Buhari during his 2017 budget presentation speech identified specific sectors as critical to his diversification agenda and I 100% endorse his selection.
“The question therefore is how do we want to be judged? Are we concerned about legacy? Do we want to be remembered as people who came, met a problem, had an opportunity but failed to make a difference?”
Stakeholders have a role to play and must stop the blame game forthwith: the federal government, legislature, judiciary, regulators and private sector players, beginning with a reliable transmission infrastructure that creates a level playing field for efficient and sustained private sector participation in the electricity generation, supply and distribution by the National Assembly (NASS) and the Transmission Company of Nigeria (TCN).