Elumelu wants Nigerian Banks to co-finance $3.4bn Transmission Networks

Chairman of Transcorp Ughelli Power Plant and former Managing Director of United Bank for Africa (UBA), Tony Elumelu, has urged the federal government to grant Nigerian banks consideration to participate in funding scheduled long-term projects aimed at boosting Nigeria’s electricity transmission network.

The government had disclosed at the recent signing of transaction documents between it and operators in Nigeria’s power supply industry that it needed about $3.4 billion to fund the expansion and upgrade plans of the Transmission Company of Nigeria (TCN) between now and 2016.

It also noted that it was considering several financing options amongst which are funding from the transmission development fund, international development banks and multilateral agencies.  The government had also indicated that such funding mix will have to come with considerate lending terms.

Specifically, the Minister of Power, Chinedu Nebo, said: “A total capital outlay of $3.4 billion is required up to 2016 to bring our transmission grid to evacuate all the generated power. Government is working out the funding of TCN long term expansion plan from a mix which will include the transmission development fund, international development banks and multilateral agencies,”

But in a swift response to the funding proposal, Elumelu whose firm alongside General Electric (GE) target to improve the generating capacity of the Ughelli Thermal Power Station to about 650 megawatts (MW) within two years, told the government that local banks in the country could raise the needed finance if given the opportunity.

Accordingly, the government is also considering a contractor-type financing for the expansion project where contractors would undertake projects and paid through long term government bonds.

Technically, TCN has been adjudged as the weakest link in Nigeria’s power supply chain with a current overall wheeling capacity of about 4800MW; the government however plans to boost power generation by 10000MW in 2014 and 20000M in 2016.