Azura Deal Only Power Agreement that Works, Says MD


Emmanuel Addeh in Abuja and Mary Nnah in Lagos

Following the criticisms that have trailed the Azura-Edo Independent Power Project, (IPP), the Managing Director of Azura Azura Power West Africa Limited, Edo, Mr. Edu Okeke has described criticisms of the only power agreement that works as ironic and funny.

Speaking yesterday on ARISE News Channel, the sister broadcast arm of THISDAY Newspapers, Okeke expressed disappointment over the way people have reacted toward his company.

“In Nigeria today, we have close to 30 agreements signed in the electricity sector. We have some of them that are clearly not working at all. We have some that are partially working and then we have one that is working. Now rather than critics probing the ones that are not working, asking why they are not working and why are the parties defaulting, it is now the only one that is working that critics are saying why are we not defaulting on it; why are we not getting it to be delinquent like others?

“It is a funny situation. When you ask the question about who signed the transaction documents and who did not sign, there is this connotation that it is a bad deal.

Okeke who said more than 2,000 Nigerians presently take credit for Azura, noted: “The question that I expect you to be asking is that who takes credit for Azura. And I would tell you that there are more than 2,000 Nigerians and non-Nigerians that take credit for Azura.”

“If you go to the Azura IPP in Benin, you would see the giant plaque that we mounted there because we know the importance of this project in the country and on that plaque we have the list of everybody that worked on the Azura Edo IPP, more than 2,000 people.

Azura Power are the owners of the 461 megawatt-capacity Azura-Edo Independent Power Project (IPP).

Okeke also shed more light on the controversy surrounding the terms of the contract establishing the station, located in Edo State.

The company maintained that the Partial Risk Guarantee (PRG) clause was not to ‘sell’ the country to the investing countries, noting that it was a standard practice during commercial contracting among parties.

The federal government had signed a partial risk guarantee (PRG) with the World Bank to provide backing for the privately-owned station, heightening fears that the indemnity agreement could trigger a sovereign default.

The senate had raised the alarm that Nigeria could lose about $1.2 billion if the country defaulted or revoked the agreement with power generation companies and argued that Nigeria’s sovereign immunity was at stake and the country’s foreign assets at risk.

However, it was gathered that Nigeria continues to pay $30 million to Azura monthly, even if it doesn’t have the capacity to take power from the plant, with the ‘get-out’ clause of $1.2 billion.

But Okeke, noted that the hue and cry about the project was unnecessary.

He argued that those who had continued to kick against it were agitated that a contract could work in the country without necessarily going through them.

Okeke argued that the United States, United Kingdom, Germany , Sweden and France would not be involved in the project if it was untidy, explaining that it only meant the World Bank was saying that “we don’t want the parties to the contract to default.”

He said: “It simply means that if there is a default, we (parties) step in. That’s what it’s about – nothing to do with the terms of the contract. In the last few days, Nigerians, notable Nigerians have been commenting a lot on agreements being signed.

“We are taking the arguments to areas it shouldn’t be. In terms of sovereign immunity and guarantee, there is no country in the world that enters a commercial contract and retains its immunity.

“Because what you are trying to say is that they can come and sign the agreement with you, but can default tomorrow and tell you they are a sovereign nation and you can’t recover your money”.

Okeke added: “Think of it today, if that’s the case, if you want to sell Eurobond , it means you can sell and we can buy and then go on to default and then you don’t have recourse to recover that money. Tell me who is going to buy that bond?

“If you have a property in Lagos and the US government says they want to rent the property from you, but if we refuse to pay rent, you can’t recover that money, are you going to give that property to that government?

“What we should be asking is: Is the contract good for the country? Not whether we are going to retain our immunity. No sovereign nation in the world enters into any commercial contract without waving its immunity.”

He opined that what that part of the contract meant was that the World Bank was going to stand behind and monitor the contract so that if there’s a default, the other party gets necessary compensation.