Transcorp Power Plc creates opportunities for investors to thrive

Despite efforts of the federal government and others to improve performance in the power sector, Nigeria’s power generation dropped by 14 per cent, month-on-month, MoM to 3,475 megawatts, MW in March 2024, from 4,043MW in February 2024, due to prolonged problems, especially limited funding, low investment, inadequate capacity to generate, transmit and distribute adequate and stable supply to consumers.

Data obtained from the National System Operator, a unit in the Transmission Company of Nigeria, TCN, indicated that except for occasional attainment of 5,000MW, supply remains relatively low, thus impacting negatively households and businesses nationwide.

But the situation would likely record an improvement following the recent listing of 7.5 billion shares of Transcorp Power Plc, at N240 per share to its Main Board in Nigerian Exchange Limited, NGX for some reasons. First, the listing is targeted at providing a platform for new investors (from the public) to be admitted into the company and diversify the existing shareholder base. Second, it aims at positioning the company access to a larger pool of capital-raising options and enhancing brand visibility and awareness. Third, it is also targeted at generating revenue to enhance the growth of the NGX in particular and the Nigerian capital market in general.

The advent of Transcorp Power Plc, a subsidiary of Transnational Corporation Plc is symbolic as the operator of the Ughelli Power Plant in Delta State, with an installed capacity of 972MW. At the time of acquisition, the plant had only 160MW capacity. Transcorp Power invested and increased the available capacity to 680.83MW (a 227% increase) within four years, surpassing the 5-year target of 670MW set by the Bureau of Public Enterprises, BPE.

Before the recent listing, Transcorp Ughelli Power Limited (TUPL) had emerged as the preferred bidder for Ughelli Power Plc (UPP) during the privatization of the national electricity assets by the Federal Government of Nigeria in 2012. Transcorp Power Limited, TPL took over the Power Plant on November 1st, 2013 and doubled available capacity within six weeks of takeover from 160MW to 324MW and by 2017 when it joined the West African Power Pool, output had risen further to 701MW. With the merger of Transcorp Ughelli Power Limited and Ughelli Power Plc, it went ahead to signed the bilateral contract for the supply of power to the Republic of Benin in 2020. Between 2021 and 2022, the company became the first Power GenCo to be awarded the ISO Integrated Management System (IMS). It received post privatization discharge certificate from the federal government, thus demonstrating the government’s confidence that it can run its operations without intervention.

Commenting on the listing, the NGX, stated: “The leading power generation company’s listing boosts the overall NGX market capitalization by N1.8 trillion, just as its shares rose by 10% on the first trading day. Following its listing on NGX, the company made its Facts Behind the Listing presentation and showcased its performance and strategy to stakeholders.”

Similarly, the Chief Executive Officer of Transcorp Power, Mr. Peter Ikenga, said: “This is a testament to our unwavering dedication to powering Nigeria’s growth. We embark on this new chapter with a sense of purpose, innovation, and a commitment to continue to deliver sustainable energy solutions in Nigeria and beyond.”

He said that the company had witnessed the transformation in its ownership, through the takeover of a government-owned asset into a leading private sector-led organization, adding that Transcorp Power presents a unique opportunity in Nigeria’s power generation sub-sector, which is pivotal to the country’s economic growth.

According to him, “Through effective maintenance and upgrading programmes, Transcorp Power has continued to ensure optimal performance of its turbines, irrespective of the section of the Plant in which they are located.”

“Whilst installed capacity has remained the same in the past few years, Transcorp Power has been able to steadily improve on its capacity utilization rate. In 2023, the Company’s utilization rate stood at 78 per cent.”