Energy: Nigeria slump hits $1bn Transcorp power investment
Transcorp announced in 2014 it would construct the 1,000-megawatt facility to help combat Nigeria’s chronic power shortages but has now told Bloomberg it was suspending the plan due to problems sourcing gas and funding.
Difficulties in finding finance for the project, which would have been one of Nigeria’s largest power plants, were compounded as low oil prices have eaten away at the nation’s foreign exchange reserves triggering a rise in import prices and surging inflation.
Attacks on oil and gas pipelines by militants in the Niger Delta, who complain that the region is failing to benefit, have reduced output, further stunting growth.
Gas shortages have plunged Nigeria’s power generation to the lowest levels in 10 years, averaging 2,464MW in June, far below its installed capacity of some 6,000MW.
Transcorp CEO Emmanuel Nnorom said that the state-owned Nigerian Bulk Electricity Trading Plc was yet to clear debts totalling 20 billion naira which it was owed for electricity it had already supplied to the national grid.
Last month Transcorp reported H1 pretax losses of 11.21 billion naira, a marked decline on the 5.16 billion H1 profit reported in the same period in 2015.
Meanwhile, the government unveiled a plan to quadruple capital spending in 2016 compared to last year and increase international borrowing to fill the 2.2 trillion naira budget shortfall as it struggles to overcome the downturn.