… N2trillion owed to GenCos DisCos, N1.9 trillion tied to electricity subsidy for 2024
…Financial burden poses risks for power generation, distribution
…Transcorp rakes in N338bn from power distribution in 2024
By Charles Ebi
Some energy experts including a former General Manager of Corporate Communications at the Abuja Electricity Distribution Company ,AEDC, Barrister Bode Fadipe, have expressed concern over Nigeria’s growing electricity sector debt, which has now reached over N4tn.
The Minister of Power, Chief Adebayo Adelabu, had admitted that the federal government owes a significant portion of the sector’s debt.
He gave a breakdown of the N4tn owed to GenCos and DisCos, revealing that N2tn is classified as legacy debt, while N1.9tn is tied to the electricity subsidy for 2024.
Additionally, both the Federal Government and DisCos are owed N450bn as part of the 2024 electricity subsidy.
The Minister also acknowledged that this financial burden poses a critical challenge to the nation’s efforts to reform the power sector, and called for a comprehensive solution to manage the debt and improve the sector’s efficiency.
However, Fadipe, who spoke with journalist in Abuja on Sunday, stressed the urgent need for the government to address the crisis.
He said the current financial burden on electricity generation companies ,GenCos and distribution companies ,DisCos, poses a serious threat to the sector’s sustainability.
Over $15bn private sector investments would be required to boost the level.of power supply in the country
Fadipe, who is the CEO of Sage Consulting Communications, said the chances of the sector emerging as a profitable, bankable, and efficient utility are extremely slim.
He warned that no investor would be willing to invest in a sector with such a massive debt overhang and lamented that the debt continues to grow as the issue of tariff parity remains unresolved, with a shortfall of about 70% still unaddressed.
He said, “The debt burden on the sector has reached a crisis proportion that requires urgent action. Unfortunately, the debt is still building as the about 70% shortfall in tariff parity remains unaddressed.
“The implication of this type of debt overhang is that it is a disincentive for investors. No investor will see this huge debt and be willing to pit his money into the business.
“As for the way out, we just have to bite the bullet and one way of doing this is to ensure the parity between the production and selling price of the commodity”.
Fadipe also emphasized the importance of moving away from reliance on foreign loans to fund the sector.
“It is also important that we begin to move away from taking foreign loans to service this sector. We cannot grow the sector using foreign loans”, he said.
Also, the Executive Director of PowerUp Nigeria, Mr Adetayo Adegbemle, told THE WHISTLER that the legacy debts are major impediments to the development of the power sector.
Adegbemle claimed that the debt is also one of the major reasons the electricity tariff seems to be getting out of reach of Nigerians.
He said, “Debts to Gencos and Discos are major impediments to investment and development of our power sector.
“This debt is also one of the major reasons electricity tariff seems to be getting out of reach of Nigerians.
“The only way out of this is for the government to clear up this debt so Gencos and Discos can reinvest in the network; it drastically reduces commercial and collection losses.
” Also, it will help to reduce technical losses because we are now able to upgrade ageing infrastructure. We should try and change our approach to these issues”.
However, Transnational Corporation Plc, has announced its financial results for the year ended December 31, 2024, recording N338bn from electric energy and capacity revenue.
Checks have revealed that the energy revenue grew by 116.67% from N156bn reported in 2023.
The amount accounts for 82. 84% of the total revenue realized by the group which is N408bn during the period under review.
The Group sustained its strong growth trajectory across its financial indicators, reinforcing its market leadership and strategic positioning.
In its audited results, Transcorp reported significant year-on-year growth, with revenue of N408bn as of December 31, 2024, representing a 107% increase over the revenue of N197bn in the previous year.
Profit before Tax grew by 132% to N136.7bn, compared to N58.8bn in the previous year. Profit after Tax improved 188 per cent year-on-year to N94.1bn in 2024, from N32.6bn in the same period last year
Operating Income grew by 83%, to N149.0bn in 2024, up from N81.4bn in the corresponding period in 2023. Operating expenses saw an increase of 105% year on year, to N62.8bn in 2024, reflecting the impact of inflation and strategic investments in operational capacity.
Net Finance Cost decreased by 45% to N12.4bn, owing to the complete repayment of foreign currency loans.
Earnings per share of the Group was N1.45 compared to N0.40 in 2023. Total assets expanded by 42% , increasing from N529.9bn in December 2023 to N751.6bn at the end of 2024.
The group declared an N10.1bn full-year dividend, representing N1.00 per ordinary share in 2024.
Speaking on the results, the President/Group Chief Executive Officer of Transcorp, Dr. Owen Omogiafo said, “Our 2024 financial performance reflects the sustainable value creation strategy of Transcorp Group.
“We have been able to consistently record impressive growth across all indices year on year, despite the challenging macroeconomic environment. In the sectors we operate, we have delivered consistent growth by leveraging operational efficiency, strategic investments, and an uncompromising focus on value creation for our shareholders.
“Looking ahead, we will deepen our growth trajectory by seizing emerging opportunities and strengthen our position across Nigeria’s power, hospitality and energy sectors even as we consider more sectors that take us closer to our purpose of improving lives and transforming Africa”.
