Elumelu Seeks Privatisation of Nigeria’s Transmission Lines to Boost Power Output

Tony Elumelu, Chairman of Heirs Holdings, who listed one of his power firms, Transcorp Power Ltd., this week at a valuation of $1.2 billion, has urged the government to revamp the power industry, which he said was crucial to revive the struggling economy.

“Even where you generate electricity, the grid cannot take it, so it’s a problem for us,” Elumelu said. “I am advocating that let us privatize transmission lines.”

Elumelu said insufficient transmission lines and lack of liquidity in the electricity market are hampering growth in the industry. The power deficit in turn is stymieing the economy and weighing on the nation’s currency, which has plunged 70% since June.

The currency crisis “is a sign of many things,” Elumelu, 60, said in an interview. “As a country, we can’t produce well enough inspite of our natural resources. The reason is lack of electricity.”

Nigeria sends less than a third of the 13,000 megawatt of electricity it generates to the grid, leaving the nation’s 200 million people dependent on home generators.

A solution, according to Elumelu, is for President Bola Tinubu’s government to lure investors to develop the nation’s large gas reserves to fuel power stations, and allow the private sector to manage the transmission lines.

Nigeria in 2013 sold about 15 state-owned generators to private companies to improve efficiency while keeping ownership of the transmission lines. But the lack of investment in the transmission assets meant that they are too weak and inefficient to wheel power to consumers.