• Wednesday, February 28, 2024
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BusinessDay

Buhari grants guarantee for Azura’s 500mw project

Azura Power Plant

Construction work on the widely acclaimed 500MW Azura thermal power plant in Edo state is expected to commence next month, after the intervention of President Muhammadu Buhari in what analysts say shows the new leader will have a central place for the private sector investment in pushing his economic agenda.

Work on the site had been stalled when former president Goodluck Jonathan failed to accede to a request by institutions funding the project, including the World Bank, for the waiver of Nigeria’s sovereign immunity to further de-risk the project.

Former finance minister, Ngozi Okonjo Iweala, who is chairman of the government backed Nigerian Bulk Electricity Trader, NBET, had sent the request to government, following the demand by the promoters of the project who have sought a guarantee that in the event of default in receiving payment for power generated and supplied to the national grid, they are able to put a claim on the Nigerian government.

However, BusinessDay learnt that the senior government officials consistently declined to grant the request, arguing there was no ground for the government to leave open the window to a potential litigation in the future.

However, BusinessDay learnt from a state governor last night, that one of the senior Federal Government officials involved, demanded a bribe of $20 million before treating the file.

President Jonathan performed the ground breaking ceremony of the almost $1 billion Azura Power on October 11 last year, to signal the formal commencement of construction at the site of what promised to be Nigeria’s most modern power plant, but a surprise delay by his officials meant that the project and its hope of substantially resolving Nigeria’s power mess were deferred.

Our reporter learnt that following representations made to President Buhari once he took office, he called for the papers, and having reviewed them, the president directed the vice president and the solicitor-general to sign the documents.

Azura-power-plant

Governor Adams Oshiomhole of Edo state confirmed the resolution of the matter and described the development as a significant breakthrough worth celebrating.

Oshiomhole said, “those who claim that APC is not working are being put to shame daily. This is a mess created by the PDP government and  a president who could not call his own appointees to order. Now president Buhari has demonstrated that the days of impunity are over and change has truly come.”

It is unclear yet, how the new administration will handle a similar obstacle on the way of progress on the 1,000MW Mobil gas fired plant in Akwa Ibom.

The Mobil power plant to be sited in Eket in Akwa Ibom state, has been on the drawing board for almost 20 years, having been first stalled during the Obasanjo administration, when the government failed to open an escrow account to be dedicated to meeting its own obligation.

Our reporter learnt that the team of Mobil officials working on the take-off of the project has since relocated to the United States.

Speaking to BusinesDay in May, the Finance Minister acknowledged the national significance of the projects and confirmed that she had already signed all papers required of her, saying she had nothing to do with the delays.

According to Okojo Iweala, “Mr President has stepped into the matter and he has asked the vice president to meet the parties to work out a solution and we will be meeting on Monday, in the hope that  the parties involved will be able to reach an agreement acceptable to all.”

Lawyers spoken to by our reporters say the globally acceptable norm is that when a government enters into a proper commercial transaction like that involving NBET, the government usually will accept to waive its sovereign immunity, to show good faith, especially in this particular case in which the government is the main backer and promoter of NBET.

By Our reporter