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Transnational Corporation of Nigeria (Transcorp) has suspended its planned $1 billion investment in Nigeria’s power sector due to dwindling gas supplies from the Niger Delta region, Emmanuel Nnorom, the company’s CEO, told Bloomberg in an interview on Thursday.

In 2014, Transcorp announced that it would raise $1 billion to construct a 1,000-megawatts gas plant in an effort to boost the company’s profit to N160 billion by 2018. In 2013, Trancorp had recorded ‎N14.4 billion in gross profit, which increased in 2014 by 92 percent to N27.6 billion. The company's gross profit, however, declined by 12 percent to N24.3 billion in 2015 due to higher borrowing costs and a weaker naira. 

“How do you make the investments when you are generating far below your current capacity due to gas problems,’’ Nnorom said.

Incessant attacks on oil and gas facilities by Niger Delta militants have caused Nigeria’s oil and gas output to decline markedly since January this year. This has resulted in lower gas supplies to Nigerian businesses, including electricity generating companies and manufacturing firms.

Transcorp owns Ughelli Power, one of the six power generating companies of the defunct Power Holding Company of Nigeria (PHCN), whose assets were privatized by the federal government. Transcorp spent $300 million to raise Ughelli Power’s generation capacity from 160MW to 700MW as of December 2014.

“My number one problem would be gas, owing to much capacity available that is not put to use,” said Adeoye Fadeyibi, Transcorp Power's CEO, who also said that Ughelli Power currently generates less than half its installed capacity due to gas supply shortages.

Given these gas supply challenges, Fadeyibi said Transcorp is now looking to diversify its sources of electricity to include solar in order to reduce the company’s reliance on gas supplies.

For the half-year ended on June 30, Transcorp posted a hefty N12.2 billion loss compared to a N4.3 billion after-tax profit in a similar period of last year.

The company said the loss was driven by an unrealized foreign exchange loss of N14 billion on dollar-denominated debts related to its power subsidiary, Transcorp Power.

Other factors that were attributed to the loss include a substantial decline in Transcorp Power’s generating capacity from 600MW to 280MW and an outstanding debt of N28 billion from the Nigerian Bulk Electricity Trading Company (NBET).

Notwithstanding the half-yearly loss, Transcorp said revenues rose 22.3 percent to N24.8 billion from N20.3 billion recorded in the corresponding period last year.

Founded in 2004, Transcorp is one of the largest conglomerates in Nigeria, with a portfolio of companies in the hospitality, power, agro-allied, and oil and gas sectors. Tony Elumelu, the Chairman of the United Bank of Africa (UBA), owns a 44 percent stake in Transcorp.