Transnational Corporation of Nigeria, Transcorp Plc, has put on hold plans to build one of the nation’s biggest power plants as a result of local gas shortage.
The gas situation in the country has made it difficult to obtain fuel and also the economic crunch is hindering efforts to raise funds for the project, Vanguard reports.
Transcorp in 2014, had said it would raise $1 billion to build a 1,000-megawatt gas-fired facility. Two years earlier, it bought the Ughelli plant in the hydrocarbon-rich Delta State from the government and more than doubled its output to 700 megawatts.
Since then, attacks on pipelines by militant groups have cut gas supplies to stations and forced millions of Nigerians to either do without electricity or buy fuel for their own generators.
While answering questions, on why the company wants to suspend its plan to build the plant,the Chief Executive Officer, Transcorp , Emmanuel Nnorom said:“How do you make the investments when you are generating far below your current capacity due to gas problems. Transcorp whose interests range from agriculture to energy, is owed over 20 billion naira (64 million dollars) by state-owned Nigerian Bulk Electricity Trading Plc, for power generated and not yet paid for.”
Niger Delta Minister Usani Usani said the government is in talks with militants, about ending the attacks on pipelines, but could not confirm whether the group which has claimed most assaults, the Niger Delta Avengers, were part of the discussions.
The partial sale of 17 former state-owned power utilities three years ago was meant to attract investment needed to expand the grid and end daily blackouts. Yet, private investors have been hampered by increasing debts owed by the government and the inability to obtain foreign exchange.
Electricity firms under the umbrella body Electricity Generation Companies in Nigeria said last month they may be compelled to shut down because of the gas and currency shortages.
The scarcity of gas has reduced Nigeria’s power generation to less than half of the installed capacity of 6,000 megawatts, the lowest in a decade, even as the country holds the continent’s largest reserves of the fuel.
