Nigerian billionaires have practically taken over the nation’s power sector from the investors that bought the assets of the defunct Power Holding Company of Nigeria (PHCN) in the 2013 power sector privatization exercise conducted by the administration of former President Goodluck Jonathan, Business Hallmark can report.
Checks revealed that while the moneybags are on the verge of completing a clean sweep of the electricity generation arm of the power sector, with their generating companies (gencos) accounting for over 75 percent of the current electricity generation in the country, they are in fierce competition with established industry players for the control of the electricity distribution arm.
The third and final arm of the electricity supply chain, the transmission arm, meanwhile, is fully controlled by the Transition Company of Nigeria (TCN), an entity wholly owned by the Federal Government.
According to BH findings, no fewer than seven top Nigerian billionaires, including Alhaji Aliko Dangote, Femi Otedola, Tony Elumelu, Deji Adeleke, Tonye Cole, Sir Emeka Offor and Tunde Ayeni, have their tentacles spread across the nation’s power chain.
Leading the pack is Africa’s richest man, Aliko Dangote, with a power generation of 1,500 megawatts.
“We don’t put pressure on the grid. We produce about 1,500 megawatts of power for self-consumption,” Dangote had revealed at a recent public event.
However, the Kano-born billionaire only has the license to generate captive power. Permits for captive power are issued by the Nigerian Electricity Regulatory Commission (NERC) to entities that intend to generate, transmit and distribute power exclusively for their own use.
By law, companies or entities awarded captive power licences are not allowed to sell electricity generated from the plant directly to a third party.
BH findings showed that while the Dangote Refinery at Ibeju-Lekki in Lagos alone has a 435-megawatt plant that can meet the total power requirement of the Ibadan Electricity Distribution Company (IEDC), his other businesses, including his cement, vehicle and food production plants, account for the remaining 1,065 megawatts.
However, a source in Dangote Industries Limited (DIL) confided in our correspondent that the group’s plants combined could only utilize about 900 megawatts, with the remaining 600 megawatts embedded power going to the national grid for a fee.
“A big chunk of the power generated at the 435-megawatt power plant at Dangote Refinery is supplied to the Eko Electricity Distribution Company (EEDC). EEDC then sells the embedded power to companies operating within its zone, especially the Lekki Free Trade Zone (LFTZ), at a specially negotiated rate.”
Investor by Default
Also having a major stake in the nation’s blossoming electricity power sector is the Chairman of United Bank for Africa (UBA), Mr. Tony Elumelu.
Elumelu’s Transcorp Power Plc is the owner and operator of the Ughelli Power Plant in Delta State with an installed capacity of 1,000 megawatts. The plant is currently operating at 972 megawatts, 18 megawatts short of its installed capacity.
Apart from electricity generation, Elumelu also has his teeth deep in power distribution with the recent takeover of the Abuja Electricity Distribution Company (AEDC) by his bank, UBA.
Kann Consortium had, at the peak of the power privatization exercise in 2013, secured a loan from UBA to acquire AEDC, making it the majority shareholder in the disco with a 60 percent stake.
However, UBA took over AEDC in December 2021 over the inability of Kann Consortium to service the $122 million debt it collected from the bank.
In May 2023, a consortium led by Transcorp Group acquired a 60 percent majority stake in AEDC after the National Council on Privatization (NCP) approved it as the preferred bidder.
Immediately after the acquisition, Transcorp Power Plc appointed Christopher Ezeafulukwe as Managing Director/Chief Executive Officer (MD/CEO) to direct the affairs of AEDC.
The acquisition of AEDC has further solidified Elumelu’s foothold in the power sector.
Coming Competition
Another major player in the nation’s power sector is Deji Adeleke, Chairman of Pacific Holdings.
Adeleke’s Pacific Energy owns two of Nigeria’s biggest independent power plants, Olorunsogo Power Plant in Papalanto, Ogun State, and Omotosho Power Plant in Ondo State.
With a 640.8-megawatt combined operating capacity, Pacific Energy rivals Transcorp Power’s operating capacity of 972 megawatts.
A 1,250-megawatt power plant in Ondo State, scheduled for completion in the second quarter of 2025, will make Pacific Energy Nigeria’s largest independent power producer upon completion.
Femi Otedola is another Nigerian billionaire with a massive stake in the nation’s power industry with his Geregu Power Plc.
Located in Kogi State in North Central Nigeria, Geregu Power Plant’s two reactors have a combined operating capacity of 435 megawatts.
Built in 2006, the power plant was acquired by Otedola in 2013, with Shanghai Municipal Electric Power Company of China serving as technical partner.
In 2024, Otedola partnered with Siemens Energy to triple Geregu’s capacity to 1,200 megawatts. The plan includes a massive upgrade of the current plant to accommodate an extra 200 megawatts and the construction of a new unit of 500 megawatts built from scratch.
In the league of major billionaire investors in the Nigerian power sector is Rivers State-born Tonye Cole.
Cole’s company, Sahara Power Group, is the lead partner in KEPCO Energy Resources Limited, the majority shareholder in Egbin Power Station, Lagos, Nigeria’s biggest power plant with an installed capacity of 1,320 megawatts.
Cole’s company, Sahara Group, is also the principal partner in the NEDC/KEPCO Consortium, owners of Ikeja Electricity Distribution (IE).
Likewise, Enugu-born billionaire Sir Emeka Offor is a major player in the Nigerian power industry.
His Chrome Group owns and manages the Enugu Electricity Distribution Company (EEDC), which supplies electricity to the five southeastern states of Abia, Anambra, Ebonyi, Imo and Enugu.
Other lesser-known billionaires with considerable stakes in the power sector are Tunde Ayeni, Sola Ayandele, Augustine Nwokocha, Gbolade Osibodu, Tope Shonubi and many others.
Business Interest
According to sources in the power sector, the surge in interest among billionaires for a stake in the power sector could be attributed largely to the impressive earnings made by already established electricity power firms in the last 10 years.
Though the impressive performances cut across the two major electricity power sectors (generation and distribution), the positive financial performance of major players in the electricity generation sub-sector, especially the two listed firms on the Nigerian Exchange Limited (NGX), Geregu Power Plc and Transcorp Power Ltd, has drawn more positive attention to the industry.
An unprecedented surge in earnings by operators in the nation’s electricity market in the last five years, BH learnt, is largely responsible for the frenzy rush among billionaires for the power gold mine.
For instance, Geregu Power, owned by Lagos-born Femi Otedola, reported a revenue of N137.1 billion in 2024, compared to N82.9 billion earned in 2023. The figure represents a 65.39 percent (N54.2 billion) growth in revenue.
Energy sales alone made up N87.4 billion, or about 63.8% of total revenue, while capacity charges made up the remaining N49.6 billion.
Geregu Power also reported a pre-tax profit of N41.2 billion in the 2024 operating year, an increase of N17.8 billion (69%) from the N23.4 billion realized in 2023.
Total dividend for the 2024 financial year stood at N8.50 kobo per ordinary share.
In the same vein, Transcorp Power Plc, owned by Tony Elumelu, reported a massive revenue of N305.9 billion in full year 2024. The realized revenue represents about 115% growth from the N142.1 billion earned in FY 2023.
Further analysis of the result shows that while gross profit grew by 89 percent from N75.4 billion in FY 2023 to N142.2 billion in FY 2024, profit after tax leaped by 165 percent from N30.2 billion in FY 2023 to N80 billion in FY 2024.
Also, return on equity grew from 52.25 percent in FY 2023 to 63.19 percent in FY 2024. This demonstrates efficient income generation from equity. Total dividend for the 2024 financial year stood at N5 per ordinary share.
In the same vein, Adeleke, owner of Pacific Energy, has been smiling to the bank owing to the recent change in fortunes of operators in the power industry.
BH gathered that the Ede, Osun State-born billionaire grossed over N80 billion in full year 2024 owing to a sharp increase in electricity tariffs across the board approved by the Federal Government.
However, BH was unable to verify the figure supplied by a source in the company as Pacific Energy is a private entity and is not listed on the NGX.