Nigeria

How $900m loan for Azura Power Plant was raised ― Mgt

How $900m loan for Azura power plant was raised ― Mgt

How $900m loan for Azura power plant was raised ― Mgt

Says Azura supplies 10% output to national grid

By Udeme Akpan

THE management of Azura Power Plant, Tuesday, said the Financial Guarantees, signed by the Federal Government was an essential document, which paved way for the raising of almost $900 million loans from the World Bank and other institutions for the construction of the Azura-Edo Independent Power Plant, IPP.

Managing Director of the company, Edu Okeke, said it could have been impossible for the company to construct the plant in Nigeria because there was no framework to guarantee investors and financiers that they would recover their investments.

Speaking on a private television programme, Okeke, said the company had no option than to work with the government to secure the guarantee required by the banks, including, FCMB/BOI – Central Bank of Nigeria, Proparco – French Government Development Financial Institution, DFI, Swedfund – Swedish Government DFI, International Finance Corporation – Multilateral DFI, ICF Debt Pool – Multilateral DFI, Standard Chartered Bank – International Commercial Bank, Rand Merchant Bank – International Commercial Bank, Standard Bank – International Commercial Bank, Mauritius Commercial Bank – Mauritian Commercial Bank and Siemens Bank – German Commercial Bank.

Okeke who noted that the construction was executed and completed ahead of record time said Azura had consistently delivered over 10 per cent of its output to the national grid.

According to him, the Transmission Company of Nigeria, TCN, also utilised part of its output in achieving system stability.

Construction

According to the project report, “The Azura-Edo IPP was built by a consortium composed of Siemens and Julius Berger in exactly 28 months. Its completion occurred eight months ahead of its 36-month construction schedule without a single lost-time injury.

As a result of this best-in-class construction performance, the Azura Edo IPP has become a performance benchmark for other large-scale infrastructure projects across the African continent.

“The plant was commissioned in the first quarter of 2018 and attained full commercial operations on 1st May 2018. Since then, the plant’s operational performance has been amongst the highest of any new-build plant anywhere in the world. Its availability rate, to date, has exceeded 96 per cent and its equivalent forced outage rate has been lower than two per cent. In consequence, during the period since we reached commercial operations, the Azura-Edo IPP has provided more than eight per cent of all the power sent to the national grid.”

Recall that some senators had last week called on the Federal Government to cancel the deal with Azura Power, arguing that the nation, which lacked the capacity to take all its output, was wasting funds in settling its bills.

Don’t cancel agreement

Meanwhile, in an email to Vanguard, National Secretary, Nigeria Electricity Consumers Advocacy Network, NECAN, Uket Obonga, who noted that the Azura deal was desirable, said: “I don’t believe that we should be calling for outright cancellation of the agreement yet.

Rather, a team of legal experts outside the Ministries of Justice and Power should carefully study the terms and conditions of the agreements and advise Government accordingly. The report or the legal opinion of this body of legal expert should inform the next line of action to be taken by the Federal Government.

“Both parties – Azura and Federal Government should revisit the Partial Risk Guarantees, PRGs, and agree on how the interest of the parties could best be protected. Nothing should be done to send the wrong signal to the international community that Nigeria cannot be relied upon to keep to the agreement. We cannot be asking for Foreign Direct Investments and at the same time willfully breaching the terms and conditions of the agreement we executed with investors who obtained credits from a consortium of foreign banks to invest in the power sector.”

However, the Principal Counsel, Okoro and Associates, Dr Kingsley Okoro, who attributed the underdevelopment of the power sector to many problems, including corruption, said: “The Call by the Senate at this time for the total cancellation of the Energy Purchase Agreement with AZURA is coming too late in the Day. Recall that this Agreement was entered into between 2016/2017 by the previous Government and government being a Continuum would be doing that at a huge cost.”

Way forward

On the way forward, Dr Okoro added: “In no other way than upgrading our critical energy infrastructural deficit, we need to build more substations, supply transformers, provide meters and revamp our decayed infrastructure.”

Vanguard

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