A Review of the Nigerian Energy Industry

Aba Power to take off soon as Jonathan moves to resolve feud between parties

27 March 2015, Lagos – President Goodluck Jonathan has stated that the feud  between Geometric Power Ltd and Interstate Electrics, the new owner of the Enugu Distribution Electricity Distribution Company (EEDC), which has stalled the take off of the 141 MW  integrated Aba Power Project, will be resolved soon.

Geometric-power plantJonathan made the pledge when he visited the site of the project built by Geometric Power Ltd at over $500million (about 100 billion naira) to generate and supply electricity to the commercial city of Aba in Abia State.

Responding to issue raised by the Chairman of Geometric Power, Prof.  Bart Nnaji, who is the immediate past Minister of Power, Jonathan noted that the problem delaying the commercial operations of the project is “man-made” and should be resolved immediately to enable organisations and individuals in Aba enjoy the benefits of the facility.

It is expected that the matter would be resolved by the president calling the two feuding parties to a meeting, rather than setting up a fresh committee on it.

Interstate Electrics led by a businessman, Emeka Offor, has been feuding with Geometric Power over the fate of the independent Aba project, following the sale of the Enugu Electricity Distribution Company (EEDC) to Interstate since November 1, 2013.

Nnaji told the president that it was “an error” for the Bureau of Public Enterprises (BPE) to sell EEDC without excising Aba out of the sale because Geometric Power has an existing agreement with the Federal Government of Nigeria since 2005 to produce and distribute power in Aba metropolis, which covers two electricity business units.

Besides, Nnaji said, the agreement provided that Geometric Power be given the right of first refusal to acquire the two business units of the defunct Power Holding Company of Nigeria (PHCN) any time the state energy utility was being privatised.

Based on the provisions of this agreement, continued the ex minister, his company invested a fortune in providing world class electricity infrastructure in Aba.

“ The city now has a 27-kilometre natural pipeline from Imo River,  over 105 kms of 33Kv overhead lines, over 40kms of new 11KV lines, five new substations consisting of our power plant’s 3 by 60MVA substation, four brand new 2 by 15MVA substations in different parts of the city, in addition to refurbishing the existing three PHCN substations through the building of three brand new control buildings with outdoor substation gantries within the premises of the existing PHCN substations”, Nnaji added.

Revealing that Geometric’s power plant was built with “state-of-the-art equipment from General Electric”, the world’s foremost electric equipment manufacturer based in the United States,  the former minister noted that the tubular poles now installed in Aba “are in a class of their own in the country”.

He told the president that Aba would be the first place in Nigeria to have uninterrupted and quality power supply within two months once the dispute with Interstate Electrics is resolved.

“The remaining interconnection work on the distribution network within the premises of the existing PHCN substations and the 11Kv lines would have been completed long ago but for the fact that Interstate Electrics chased away our contractors and consequently stopped businesses and people in Aba from enjoying the benefits of the integrated power project”, he added.

Nnaji disclosed that his firm pays $3.5m monthly as interest on the $500 million  borrowed from Diamond Bank and other Nigerian financial institutions, saying the banks were able to provide the facility because the “federal government’s concession of Aba metropolis to Geometric Power is a valid agreement, which the Bureau of Public Enterprises gravely violated by selling the entire Enugu DisCo without excising Aba out of the transaction, as required in the agreement with the Federal Government of Nigeria over the building of the integrated Aba Power Project.

“This means the BPE, in effect, double-sold Aba metropolis (which includes Aba and Ariaria electricity business districts) to our company and Interstate Electrics”, he stressed.

He warned that the “obnoxious sale of a well-structured deal with the federal government will send a dangerous signal to international investors that Nigeria does not regard agreements as sacrosanct.”

Jonathan praised Nnaji for his vision and drive in building the facility, which predated the liberalisation of the electric power sector, acknowledging that any person without his determination and courage would have fallen under the burden of actualising the dream.

Eight committees have been set up by the National Council on Privatisation, Ministry of Power and Nigerian Electricity Regulatory Commission (NERC) to resolve the matter, with each report advising the government to respect the agreement with Geometric Power.

Among top government officials who visited the site of the Aba Power Project was the  the Coordinating Minister for the Economy and Minister of Finance, Dr.  Ngozi Okonjo-Iweala. She was said to have convinced  Nnaji to initiate the facility in 2004 after visiting the Ariaria Shoe and Leather Market in the company of the then World Bank president, Jim Wolfensohn, and were informed by the manufacturers that “the greatest impediment to our work is the near total absence of electricity”.

Meanwhile, the president’s promise to resolve the rift between Geometric and Interstate has already begun to elicit positive reactions from stakeholders.

“This is the best news we have heard in recent years”, declared one of the leading industrialists in Aba, Chief John Udeagbala.

A former president of the Aba Business Club, Echeme Nnana Kalu  noted that an early end to the electricity blight “ will turn out be the elixir to turn manufacturing and general business around in this city and environs.”

Also, chairman of the Southeast Zone of the National Association of Chambers of Agriculture, Commerce, Industry and Manufacturing (NACCIMA), Azuka Alagwu  stated that “once Aba begins to enjoy the quality and uninterrupted power supply, it will drive the economy of the rest of the country”.

Similarly, coordinator of the South East Economic Development Commission (SEDEC), Mr. Chris Okoye described the resolution as “the first step in the effort to make the Southeast regain its status as the nation’s foremost region of indigenous science and technology as well as manufacturing.”

Meanwhile, former president of the Nigerian Economic Summit, Mazi Sam Ohuabunwa
who is also the immediate past chief executive of Nemeith Pharmaceuticals plc, has announced that a manufacturing plant of the pharmaceutical company will be established in Aba “the moment the city begins to have constant power”.


– This Day

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