- Transcorp reported a record-breaking N338 billion in revenue from its electricity business, reflecting a 116.67% increase from 2023.
- The N4tn debt is divided into N2tn legacy debt, N1.9tn 2024 subsidy and N450bn owed to both the Federal Government and (DisCos) as part of the subsidy.
Nigeria’s electricity sector is facing a deepening financial crisis, with industry experts warning that mounting debts and unresolved tariff shortfalls threaten its sustainability. The country’s electricity sector debt has now exceeded N4 trillion, raising concerns about its viability and ability to attract investment.
However, in sharp contrast to this grim outlook, Transnational Corporation Plc (Transcorp) has reported a record-breaking N338 billion in revenue from its electricity business, reflecting a 116.67% increase from 2023. The company’s success highlights the potential for profitability in Nigeria’s power sector, but experts argue that broader systemic reforms are urgently needed.
Mounting Debts Threaten Sector Viability
According to Minister of Power, Chief Adebayo Adelabu, the N4tn sector debt is divided into:
- N2 trillion as legacy debt
- N1.9 trillion tied to the 2024 electricity subsidy
- N450 billion owed to both the Federal Government and Distribution Companies (DisCos) as part of the subsidy
This financial burden continues to weaken the sector, discouraging investors and limiting the capacity of Generation Companies (GenCos) and DisCos to expand and improve services.
Barrister Bode Fadipe, former GM of Corporate Communications at Abuja Electricity Distribution Company (AEDC), emphasised that without urgent government intervention, Nigeria’s power sector will struggle to attract the $15 billion private sector investment needed to enhance electricity supply.
“The debt burden on the sector has reached a crisis proportion. No investor will see this huge debt and be willing to put money into the business. We need to ensure parity between electricity production and selling price,” Fadipe warned.
Similarly, Adetayo Adegbemle, Executive Director of PowerUp Nigeria, argued that unresolved debts make electricity tariffs unaffordable for Nigerians. He urged the government to clear outstanding debts, allowing DisCos and GenCos to reinvest in infrastructure and reduce commercial and technical losses.
Transcorp’s Electricity Business Record Gains
Despite the power sector’s challenges, Transcorp Plc has emerged as a financial powerhouse, with its electricity business contributing significantly to the group’s overall revenue growth.
In its audited 2024 financial results, Transcorp reported:
- N338bn in electricity revenue, accounting for 82.84% of its total revenue
- A 107% increase in total revenue, reaching N408bn
- Profit before tax of N136.7bn, up 132% from 2023
- Profit after tax of N94.1bn, marking a 188% year-on-year growth
Operational efficiency, strategic investments, and improved power generation capacity drove the company’s financial performance. Notably, Transcorp completed the repayment of foreign currency loans, reducing its net finance cost by 45%.
Dr Owen Omogiafo, President/Group CEO of Transcorp, stated, “Despite the challenging macroeconomic environment, we have consistently recorded impressive growth across all indices. We remain committed to improving lives and transforming Africa’s power sector.”
While Transcorp’s success suggests that Nigeria’s power sector can be profitable, industry experts warn that broader sector growth remains unlikely without resolving the debt crisis, tariff shortfalls, and infrastructure deficiencies.
The key solutions proposed include:
- Clearing legacy debts to restore investor confidence
- Ensuring tariff parity between electricity production costs and consumer pricing
- Reducing reliance on foreign loans to fund sector operations
- Modernising power infrastructure to reduce losses and improve service delivery
Nigeria’s power sector sits at a crossroads. While companies like Transcorp thrive, widespread debt, poor financial planning, and policy gaps stifle sector-wide progress. If urgent reforms are not implemented, the sector risks further deterioration, making reliable electricity access even more elusive for millions of Nigerians.