Elumelu, who is also the chairman of Heirs Holdings and
Transcorp Plc disclosed this during an interview on Arise TV yesterday said.
According to him, these reforms are the major catalyst
needed to boost economic activities in the country. He said, “The power sector
has three parts it, there is generation, transmission and the last mile which
is distribution. Transcorp through Transcorp power and Afam power today in
Nigeria own the highest generating capacity in Nigeria that can generate 2000
MW of electricity per day but unfortunately we do less that 500 MW at this
point in time and the major constraint in this area is gas then there is the
issue of transmission and there is issue the issue of payment.
“For this to work well and for us to generate more, we need
to have gas and our group has invested in oil and gas. And so, for us as a
group, it is not necessarily for oil, it is because of gas because we want to
be able to assure, we have gas from our oil and gas production to convert to
electricity.
“The acquisition we did recently, I’m happy to say it is
already supplying gas to our power plant. But going back to the subsidiary
element, the issue of transmission, we need to make sure we stabilize our
transmission for take-up.
“This country needs 100,000 MW of electricity per day for us
to power the economy. But today, we operate less than 5,000MW and we need to do
more. So, the transmission lines need to be stabiles.
“Another critical part is payment and the distribution and
metering. I must commend the CBN and Governor Emefiele because he has done very
well because he came into the meter end to help increase revenue in that space.
“For the power sector to work, it must work well if we have
to drive this economy. We need to increase generation, make sure we fix gas
supply to generating companies and we need to make sure the transmission lines
are utilised to evacuate the power and we need to make sure that power
generated are taken by discos and the end users and they pay.
“Power is still a critical sector; we need to invest and the
stakeholders need to make sure that it works. And when it works, the country’s
economic development becomes more real.
“Every sector of our economy need the power sector and I
think we need to prioritise it more, but I commend efforts going on and also by
making sure we privatise the remaining ones. The transmission lines need to be
fixed and we need to make sure we improve the payment system.”
Elumelu also advocated for the privatisation on the entire
value-chain of the power sector, saying,
“The area of privatization of transmission lines, I think that
ultimately, it should be privatised. What some of us have advocated is that the
gencos, the discos and the entire power stakeholders should come together and
have a deal with the federal government to take over the transmission lines and
it would be in our self-interest to make sure it works.
“We have the transmission lines and it doesn’t work when you
are generating, there is no way you would evacuate your power. That sector is
so critical and pivotal for the survival of power sector. It is critical to
improving access to electricity and where it is now there is no problem but
what is important to us is that we have expanded capacity.”
Following the sack of the Oba Otudeko-led board of FBN
Holdings due to insider related non-performing loans, Elumelu said his
companies are not exposed to insider loans.
He said his other
business ventures are well below the exposure threshold.
Elumelu noted that his oil and gas interests are financed by
a consortium of other local and international banks excluding UBA and that
other ventures have exposure below the threshold and the loans are performing.
Transcorp Plc which he chairs, recently bought the Afam
power plant in Rivers State, with capacity of 966MW. Speaking on the
acquisition, he said, “The oil and gas
acquisition we just made, UBA did not participate in the funding.
“It is a club of international and local lenders. The local
receiving bank for our proceeds is Union Bank of Nigeria and the international
receiving bank of our oil sales is Standard chartered bank London. The
transaction was funded by consortium of banks Standard Chartered, ABSA IN South
Africa, Afrexim, Union Bank, Fidelity bank in Nigeria and a host of other
international banks.
“So, we are minded of all this and we are very prudent in
making sure we do not put pressure on the bank. we also put in equity
investment and when we need to get investment, we try not to put pressure on
the institution. What is important is that it is within the limit UBA should be
exposed to a company and it is by the way performing very well.”
Commenting on the CBN and FirstBank board tussle, he noted
that the decisions made where appropriate and beneficial to all the major
stakeholders involved and that the resolution is in sight.
“I know the shareholders of the bank, and I also know the
regulatory mindset and the regulators want a safe banking environment and I
believe the shareholders also seek that in due course, I believe they would be
able to resolve the issues. I must say the banking sector has done very well,
both the regulatory part and the participants.”