Africa-focused investment group Heirs Holdings chairperson Tony Elumelu has outlined the company’s ambition to generate at least one-quarter of Nigeria’s power consumption needs in the next five years, building on its existing energy interests in the country, which include Transcorp Ughelli Power – a gas-fired, thermal power generating plant which was acquired under the privatisation of Nigeria’s power sector.

He noted that the group had taken the plant from an initial 150 MW capacity, in November 2013, to 450 MW today, and expected to increase this to 700 MW by October and 1 000 MW by the second quarter of next year.

“At that rate, we’ll be contributing 20% of Nigeria’s total power generation,” Elumelu commented.

He added that Heirs was also currently working on a greenfield project that would expand the capacity of Ughelli by an additional 1 000 MW in the next three to five years, having signed a memorandum of understanding with energy providers General Electric and Symbion Power to facilitate this.

According to Elumelu, the power industry was a catalytic sector and the development of Nigeria and the continent could not happen without “fixing it.”

Elaborating on the challenges of operating in Nigeria’s power sector, he said unreliable transmission infrastructure, unpredictable access to gas supply and the delayed settlement of invoiced payments were the biggest impediments.

“In Nigeria, one of the biggest challenges to power generation is transmission and, in fact, while the Ughelli power plant [operated] at full capacity for the first time in July, we’ve been asked to scale down generation because of the outdated transmission systems; for every 100 MW generated and sent to transmission companies, 40% is lost, in part, because of this infrastructure issue,” Elumelu lamented.

While regulation was not a key challenge, it was an issue within the sector, which, if addressed, had the potential to speed up sector growth exponentially.

“We need pragmatic regulation that recognises that within Nigeria, the sector is nascent and so policies must be designed to encourage growth. In fairness, the federal government is confronting these challenges head on,” Elumelu commented.

Terming his economic philosophy as “Africapitalism”, which he said placed more weight on long-term investments in key sectors that drove growth, Elumelu believed that Africans were uniquely qualified to take the lead and develop the continent.

“I think we need to be more self-confident to create the sort of future our children deserve. All the ingredients for success are here in Africa and investing for the long term in key sectors, our people and processes will help to solve our problems and retain wealth within the continent,” he maintained.