Sooner or later, residents of Aba, the commercial nerve of the Southeast will be less dependent on the national grid for their electricity supply. President Goodluck Jonathan was there to inaugurate the first phase of the Alaoji National Integrated Power Project (NIPP).
The President inspected facilities at the Geometric Power/Aba Power Limited, the companies behind the NIPP, promising that the Federal Government would resolve all pending issues so that residents of the commercial city will enjoy uninterrupted power supply.
The company, since the completion of its plant, had been having issues with the Enugu Electricity Distribution Company (EEDC) over franchise-related matter. But President Jonathan, impressed with what he saw during his inspection of the facility, vowed that the Federal Government would not allow such heavy investment to be a waste.
“This project is well-planned and will change the face of Aba in terms of power supply. Aba is a city that is highly industrialised with so many small and medium enterprises that need stable power supply to grow better and create more jobs for our people. We need to resolve this matter. This kind of investment cannot be a waste. We must call the parties involved in the matter–government, Geometric and EEDC to resolve the matter,” the President promised.
He praised former Power Minister, Prof. Barth Nnaji who is the chairman of Geometric Power/Aba Power Limited, chairman Diamond Bank, Pascal Dozie and Governor Theodore Orji for their support towards the project.
The Minister of Power, Prof. Chinedu Nebo said his ministry was working hard towards finding an amicable solution to all issues among the Federal Government, Geometric Power and the Enugu Electricity Distribution Company.
Prof. Nebo noted that with a capacity of 141 megawatts of power, the company was capable of satisfying the electricity needs of the entire Aba metropolis, adding, “the excess power generated by the plant would be absorbed into the national grid.”
Outlining the genesis and operations of the plant to the President, the chairman of Geometric Power/Aba Power Limited, Prof. Nnaji described the project as “a child of necessity.”
He said the desire of Aba industrialists, including the small and medium-scale industries and “our desire to contribute our quota to increasing power supply in the country began over 10 years ago.”
According to him, it was realised that the best way to ensure that Aba city quickly has reliable and affordable electricity was to build this off-grid power project that serves the metropolis.
He added that at the same time, the then World Bank President, Mr Wolfensen and the then Finance Minister who is the current Finance Minister and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala met with Aba industrialists, including the Aba Ariaria manufacturers (SMEs).
At the meeting, the Ariaria manufacturers were asked to identify their number one problem which if addressed would significantly improve their production; they unanimously said it was reliable electricity.
He outlined: “Mr. President, this convergence of desire for reliable electricity is what led us to this historic Aba Integrated Power Project. At that time, I and our development partners from the International Financial Corporation (lFC) of the World Bank, the European Investment Bank (EID) and the Emerging Africa Infrastructure Fund (now known as FMFM), wanted to find a business model for power development in Nigeria that is sustainable, can stand on its own, and can be easily replicated by various investors in other major cities in Nigeria.
“We recognised that the country will not be able to afford sovereign guarantee for all of its power needs. We, therefore developed a model of customised embedded generation that would not require sovereign guarantee.
“Consequently, we set about developing this integrated power project to satisfy the electricity needs of Aba metropolis at a time when the Power Sector Reform Act of 2005 was not yet enacted. In 2005, the Federal Government had to concession Aba metropolis as the only security of the investment in the project instead of the normal sovereign guarantee. We have met the terms of our concession agreement with the Federal Government, by building this 141MW Power Plant with state-of-the-art equipment from General Electric (GE) and rehabilitating the entire distribution network in Aba.
“In addition to the power plant, we have built over 105 km of 33KV overhead lines within the Aba metropolis. You can see Mr. President that the steel tubular poles used to build the 33KV line infrastructure is unlike any other in Nigeria. We have also built over 40km of new 11KV lines in Aba. We have completed five new sub-stations consisting of the Power Plant’s 3x60MV A sub-station; four new 2x15MV A sub-stations at various parts of Aba town.
“In addition, we have refurbished the only three existing Power Holding Company of Nigeria (PHCN) sub-stations which are dilapidated, by building three new control buildings with outdoor sub-station gantries within the premises of the existing PHCN sub-stations. In order to ensure the reliability of gas supply, we built a 27km gas pipeline from Imo River to this power plant and built the gas infrastructure to support the supply of reliable gas to the power plant. To date, we have invested over $500 million or over N100 billion in this project.
“The power project is virtually complete, the power plant, various sub-stations and 33KV lines have been energised and fuel is available for this project. The remaining interconnection work on the distribution network within the premises of the existing PHCN sub-stations and the 11KV lines should take less than two months.
“This was the remaining work that was being done by our contractors before the entire Enugu Electricity Distribution Company was handed over to another party by the BPE without excising Aba from the sale.”
Continuing, Prof. Nnaji informed Mr. President of the protracted issue that has been holding down the company from switching on the plant and start power generation and distribution.
He said: “This action, in spite of our valid concession agreement and your assurances that the agreement was sacrosanct, emboldened the operators of EEDC to stop our work and chase away our contractors from the sub-stations thereby ensuring that Aba people will not get benefit of this project. This means that the BPE, in effect, double-sold Aba metropolis (which includes Aba and Ariaria in spite of the very fact that the agreement we had with the Federal Government clearly states that whenever there is privatisation, our company has first right to purchase the facility in Aba hence our heavy investment in this project.
“As you can see Mr. President, the developers and investors in Aba IPP have developed a world-class electricity infrastructure with the belief that their investment in Nigeria is safe. We have made all effort to get BPE to correct what (for choice of words) may be called an “error”.
“So far, they have not yielded to doing the correct thing. Rather, they have sought to justify this error and have continued to politicise the situation unnecessarily, thereby playing with the investment of this magnitude that aims at improving the well-being of our people and the interest of our country and the people of Aba at heart.
“Mr. President, I and the other investors in the Aba answered the call of our beloved country to come home and be part of the development of our dear country. The investors and stakeholders include members of the Aba business community, United States Agency for International Development (USAID) and our banks, especially Diamond Bank.
“This travesty has been very cruel to us all. People in the investment community continue to wonder if this can happen to Nigerian investors with a well-structured agreement. How then can they be sure that their investments and agreements will not be breached in the future? This action by the government has certainly put cold feet on the legs of potential investors. The only instrument for doing business in developing and developed countries across the globe is an agreement, which must be respected and held sacrosanct by all parties.
“All the various committees set up to look into this issue have come up with the same answer: that our agreement should be respected by the Federal Government and that Aba power should be offered the Aba and Ariaria Electricity Business Districts as enshrined in the agreement. I have been assured by Mr. Vice-President that the technical committee of National Council on Privatisation (NCP) and the NCP legal committee have made the same recommendation.
“However, the painful fact is that this critical issue has been left festering since November 2013. It costs our company $3.5m in bank interest charges alone; plus more than N30 million for insurance coverage; other operational expenses every single month to carry a project that is not yielding any revenue due to the deliberate, hostile and crippling action of Enugu DISCo and the BPE over 15 months ago.
“So far, about eight committees, including committees of the NCP, Nigeria Electricity Regulating Commission (NERC), and Ministry of Power among others, have investigated this matter and came up with the same recommendation. There is no more need for another committee; all that it requires is your decision and firm action that will ensure the full implementation of their recommendation to sell Aba metropolis to Aba Power.
“We are therefore pleading with you to take a decisive action today and rescue our company and the people of Aba from the shackles of deliberate man-made mischief. We also plead with you to ask Enugu DISCo (EEDC) to immediately allow our contractors to complete the interconnection works that will allow Aba to receive this power.
“Please, give the people of Aba an opportunity to get the intended benefit of this project, which is absolute reliable electricity. It is unfortunate that the powerful economic and political saboteurs within the system have denied your administration the golden opportunity of using the Aba metropolis electricity ring-fence as a shining example of your power reform agenda.
“Nevertheless, we remain fully committed to ensuring that this project will be completed under your watch for the benefit of Aba Business Community and the Nigerian people.
“Our team has worked very hard and made personal sacrifices to ensure that this project will be the first fruit of your power reform initiative in which the private sector will be empowered to drive power production and distribution in Nigeria. It is for this reason that it gives our people tremendous joy that you are here today. We hope that your visit today will liberate the Aba Integrated Power Project and release the huge economic potential of an “Enyimba City” (Aba) where electricity will be taken for granted. We are confident that your action in finally resolving this issue will do wonders for the regional economy and create hundreds of thousands of jobs for our teeming youths.”
