Transcorp Group Chairman, Tony Elumelu, has issued a stark warning to the Nigerian federal government, stating that the nation’s electricity supply system is on the brink of collapse unless urgent action is taken to settle massive debts owed to power generation companies (GenCos) and accelerate critical sector reforms. Speaking forcefully at Transcorp’s 19th Annual General Meeting in Abuja on Wednesday, Elumelu revealed that the government owes his company alone over N600 billion, equivalent to approximately $400 million, for electricity already produced and fed into the national grid.
Addressing shareholders directly, Elumelu lamented the unsustainable burden placed on GenCos, who are effectively subsidizing the power sector by not receiving payment for the electricity they generate. “As of date, our federal government owes your company over N600 billion. That is $400 million,” he stated, emphasizing the precarious financial situation. “Much as we, as patriotic Nigerian investors, are committed to supporting the effort of the federal government facing the economy, we have another excruciating burden of subsidising the sector as producers who do not get paid for the electricity we generate. We put it on the grid, and it is consumed on the grid. This, you will ask, is totally not sustainable. It requires urgent attention.”
Elumelu’s dire assessment comes against a backdrop of persistent power outages, grid instability, and chronic liquidity issues that have plagued Nigeria’s electricity market for over a decade, despite the privatization of generation and distribution assets aimed at attracting investment and improving supply. While acknowledging President Bola Tinubu’s administration’s efforts to initiate reforms, including clearing GenCo debts, expanding metering through the Presidential Metering Initiative (PMI), and separating system operations, Elumelu expressed deep concern over the slow and uncoordinated pace of implementation.
“While the intention behind this initiative is very good, these intentions can only be achieved through ruthless, result-oriented and timely execution before this sector collapses in our very lives,” Elumelu cautioned. He implored all stakeholders involved in executing the president’s directives to prioritize this “critical national task” with immediate urgency. Specifically, he called on the government to finalize debt repayment processes that commenced late last year and to expedite the nationwide delivery of electricity meters.
Furthermore, Elumelu stressed the urgent need for increased investment in gas infrastructure, highlighting that constraints in gas supply continue to impede power generation across the country. He pointed to the long-delayed OB3 pipeline project, designed to connect the eastern and western gas networks, as a vital intervention that requires completion. “Nigerians need improvement in access to electricity,” Elumelu asserted. “The Transcorp Group alone is owed over $400 million. We want this paid so that we can help actualise the president’s vision for improving electricity supply to Nigeria.”
Despite the significant challenges within the power sector, Elumelu noted the continued strong performance of Transcorp’s diversified businesses, including Transcorp Hotels, Transcorp Power (managed by Abuja Electricity Distribution Company), and Transcorp Energy. He proudly announced that the group’s combined listed market capitalization had surpassed N4.5 trillion, a remarkable increase from less than N20 billion when his group took over in 2011. He also highlighted the potential for further growth from unlisted assets such as AEDC and Transcorp Energy’s OPL 2SL.
“Pay Us Now or Darkness Looms”: Elumelu Warns FG on Imminent Power Sector Collapse
