Transnational Corporation of Nigeria has suspended plans to build one of the nation’s biggest power plants over gas shortage.
The company cited the poor economic situation in the country as reason for its decision. Attacks on oil and gas installations in the country by Niger Delta militants has also contributed significantly to the problem, making it difficult to obtain fuel.
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.
“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.”the Chief Executive Officer, Transcorp , Emmanuel Nnorom said.
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 fue