Geometric accuses Interstate Electrics of neglecting agreement on Aba Power Project

Geometric Power's Independent Power Project, IPP, Aba.

Geometric Power’s Independent Power Project, IPP, Aba.

25 July 2015, Lagos – Geometric Power Limited, GPL, has accused Interstate Electrics Limited of neglecting the validity of the lease agreement between Geometric and the federal government over the concession of a ring-fenced area of the Aba metropolis in Abia State.

The company said in a statement thursday that it was shocked by the attempts being made by Interstate on behalf of Enugu Electricity Distribution Company (EEDC) to rewrite history and deceive the public on several issues about Aba Integrated Power Project and the validity of the agreement between Aba Power Limited and the federal government.

According to the statement, the current efforts by Interstate are in furtherance of the company’s efforts “to brazenly use impunity to take over our company’s investments to significantly upgrade the capacity of the Distribution Network Assets in Aba from an obsolete 90MVA capacity to a brand new network of 210MVA, including concerted attempts to intimidate our investors, the financial markets and staff, thus ensuring that the Aba IPP does not come to fruition.

“On May 11, 2004 Geometric Power (GP) entered into a Memorandum of Understanding (MoU) between GP and the federal government, to build an integrated power project in Aba with a concession of a ring-fenced area of the Aba metropolis as the off-taker of the power generated and the only financial security for the project in the absence of a sovereign guarantee,” said the statement.

The statement added that in April 2005, Geometric and its sister company, Aba Power Limited, further enshrined the contents of the MoU in a binding agreement with the federal government and NEPA for the project to serve Aba metropolis.

With the subsequent unbundling of NEPA in 2005, Geometric added that a Supplemental Agreement was made in 2006 between the parties and the relevant unbundled successor companies of NEPA, including Transmission Company of Nigeria (TCN) and Enugu Electricity Distribution Company (EEDC).

“In preparation for privatisation of the PHCN assets and in recognition of the Aba Power’s Agreement with the federal government, the BPE management in 2006 registered Aba Electricity Distribution Company Plc (Aba Disco) at the Corporate Affairs Commission (CAC) as a 12th Disco, in order to ensure compliance and full implementation of Aba Power’s rights over the Aba ring-fence. Shareholders of Aba Disco are the BPE and Ministry of Finance Incorporated (MoFI) represented by Mrs Irene Chigbue and her colleague in MoFI”.

“Thus our investors relied on these to raise the funds used in bringing the distribution network to international standard. These include constructing an embedded141MW Power Plant, over 105 kilometres of 33kV overhead lines, over 40 kilometres of 11kV lines, 4 new substations, and a 27km gas pipeline. We had also completed more than 95% of rehabilitation works ,and construction of three new control buildings at the 3 NEPA/PHCN leased substations before Interstate Electric took over EEDC in November 2013 and promptly suspended our contractors’ access to sites; granting of permits for construction/rehabilitation works at the three leased substations; and approval of outages for work on the overhead lines. They have rebuffed all interventions by well-meaning senior government officials in the past administration to resolve the matter,” the statement explained.

Geometric accused EEDC of seeking to negate the existence and validity of all the facts, deceive its investors and the public about several issues regarding the Aba project.

The company also cited an October 30, 2013 letter written by the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, directing the Chief Executive Officer of Enugu Electricity Distribution Company to ensure that the lease agreement was implemented.

*Ejiofor Alike – Thisday

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