A Review of the Nigerian Energy Industry

‎Finally, NERC, BPE validate Geometric Power’s right over Aba

Geometric Power plant
Geometric Power plant

Oscarline Onwuemenyi

22 July 2015, Sweetcrude, Abuja – The Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) have both validated the rights of Geometric Power Aba Limited, to generate, transmit and distribute power to and within the Aba and Ariaria districts in Abia State.

This is coming after months of legal wrangling between Geometric and another private power firm, Interstate Electrics, over who owns the rights to operate in the area.

Interstate Electrics, which won the the recent power privatisation bid for the Enugu Electricity Distribution Company, EEDC, which covers the Enugu-Abia-Imo zone, had insisted that Geometric is shut out of the Aba area in which it has already invested over $500 million in building a 200 megawatts power plant.

Interstate has consistently ignored existing agreements between the Federal Government and Geometric, vesting on the latter, the rights to generate and distribute power in Aba unhindered.

In a letter reference number NERC/01/CH/SEC/13/305 and signed by Chairman of NERC, Sam Amadi said, “It is important to reiterate for the benefit of doubt, the existence of a legally valid and binding lease agreement dated April 28, 2005 between the Federal Government of Nigeria, Geometric Power Aba Limited, Aba Power Ltd and PHCN.

“While the encumberance on the property purchased by EEDC is unrelated to the issue of ownership of EEDC, Interstate Electrics as the new owner is legally bound to respect the lease agreement which it is inheriting along with the purchase of EEDC.”

In a similar statement, BPE which is charged with conducting the privatisation programme, also acknowledged that “Aba Power Limited (owned by Geometric) has a subsisting contract to generate, transmit and distribute power in the Aba and Ariaria districts of Enugu Disco for 20 years. We are not aware that Interstate has denied the existence of the lease agreement.”

The crisis began when Geometric which is expected to turn on the lights at its Aba plant, successfully negotiated a N15bn investment deal to help mitigate the debt that has piled up as a result of delays in streaming the plant.

Interstate surprisingly put out a public notice seeking to scare away investors from Geometric by asserting its rights over Aba in total disregard of the existing contracts and the recent ruling of aHigh Court which also validated Geometric’s lease agreement with the Federal Government.

In a statement yesterday, Geometric denounced the ploys by Interstate to continue to deny the people of Aba improved power supply by frustrating the take off of the Geometric plant.

The company restated that the two rights it secured from the Federal Government in 2005, long before the privatisation of the Enugu Disco was contemplated, gives it a 20 year lease over the assets, as well as vesting on it the first right of purchase of the assets, should the Federal Government decide to sell.

In attempts to resolve the long standing dispute between Geometric and Interstate, the Federal Government and its agencies set up eight committees at different times to study the matter and at the end of each of the work by the committees, Geometric’s rights were validated, but on each occasion, Interstate has ignored the recommendations of the committees.

Former Vice President Namadi Sambo was fingered as using his office to perpetrate Interstate’s push to deny Geometric the chance to put on the lights in Aba and bring and end to the darkness in the region.

A senior presidency official confirmed that the Buhari administration was closely following the ugly developments in Aba and that it “will clean up the mess in a short time because the good people of Aba deserve better.

“We sense a form of economic sabotage in this. If a company with a legal contract is able to provide power to a people held down by darkness, why should any one attempt to stop it?” asked the official, speaking in Abuja on condition that he is not named.

Former President Goodluck Jonathan received calls from well meaning Nigerians to ensure that he resolved the Geometric/Aba Power issue with Interstate Electric before leaving office on May 29, 2015.

It will be recalled that the week preceding the presidential election, Jonathan visited the Aba Power plant and marveled at the huge investment made by Geometric Power. He said the problem was “man-made” and promised to resolve all the pending issues that have prevented Geometric Power/Aba Power Limited from turning on their plant that would have enabled the myriad of businesses and residents of Aba, the commercial hub of Abia State, enjoy constant power supply.

Jonathan admitted that “the Aba Power Project was well planned and would change the face of Aba in terms of power supply, especially as the city is highly industralised, with so many small and medium enterprises (SMEs) that need stable power supply to grow better, and create more jobs for our people.”
A number of Igbo groups had called on President Muhammad Buhari to promptly bring an end to the ploy by Interstate Electrics, owners of the Enugu Disco to shut down the Geometric power located in Aba.

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