Your company was born out of the desire to transform the power sector in Nigeria. How exactly do you do that?
I wanted to add value in Nigeria based on the experience that I had gained at Barclays. At first, we operated as Trennco Consulting, and I did some consultancy with a number of my clients that held oil and gas assets but did not know how to monetize them. For several months, we brought in technical and financial companies before finally deciding to stay in Nigeria to continue the business. Two or three years into the consultancy, policy continuity in the oil and gas sector was uncertain, so I decided strategically to look at the power sector. My father used to work for the National Electrical Power Authority (NEPA) decades ago, and he always talked about how he left blueprints on how to expand the power transmission grid in Nigeria. However, no significant improvement has occurred. When he left NEPA, Nigeria generated 4,000MW of electricity and should be at 40,000-50,000MW now, but the figure has not changed. This got me looking into how I could add value to the power sector and bring about impactful changes. I focused on the transmission segment of the power value chain, reasoning that if you lacked a robust transmission infrastructure sector, generated power is stranded with nowhere to go.
What projects are you currently involved in?
The government has privatized generation and distribution, but retained transmission, so we initiated proposals to the government to work out how it intended to grow that component of the sector. Transmission lines and substations form the backbone of the grid in Nigeria. The government via the Transmission Company of Nigeria (TCN), our main client, oversees the construction of transmission infrastructure through third parties like my company, whereby we perform the engineering, construction, and procurement (EPC) involved in building new transmission lines. For example, we bid for and won one of the lines in the southwest of Nigeria and are currently in the latter stages of executing the project. Whilst executing the project, we realized this was a less than optimal way to grow the transmission sector, as you are import reliant on materials from China or India. We started conversations with the government a few years ago to understand why there was a lack of local industry capabilities to produce these materials. We started looking into integration projects to support our existing business and manufacture materials locally. We are at a good stage in this regard and hope to launch in 2022. Nigeria needs to increase its power generation capabilities to fuel its industrialization and growth. Generation without transmission, however, is ineffective. Trennco wants to grow the transmission infrastructure sector, and we have strategic partners working with us to achieve this. The transmission sector is still owned by the government; however, private companies could potentially take sections of the infrastructure grid and ensure performance within their transmission segment, thus ensuring efficiency levels improve. There have been conflicts over privatizing the transmission sector. Overall efficiencies, however, would have to be driven through government policy.
Since the privatization of the power generation sector in 2013, there has not been much improvement in the sector. What issues persist in the sector?
The assets were overvalued, and the process was not as transparent as it could have been, with sector efficiencies not being prioritized. Many companies purchased assets that were overvalued, and when they realized their true capacity, a crisis ensued, with numerous bailouts following. The issues within the power sector are far reaching, and in generation, transmission, and distribution, you need to create plans to improve each segment separately. Within our own space in the transmission sector, we aim to be as efficient as possible and add value. There is continuous dialogue about privatizing the transmission sector, but it is a case of wait and see.