By Uche Usim, Abuja
Geometric Power and Interstate Electric, owners of the Enugu Electricity Distribution Company (EEDC), have reached a truce over the Aba ring-fenced area, with both firms signing the Asset Sale Agreement (ASA) on Wednesday.
At the signing ceremony in Abuja, the Director-General of the Bureau of Public of Enterprises (BPE), Mr Alex Okoh, said that the ceremony marked a significant milestone in the process of the power sector reform given the long-drawn process of the transaction.
He noted the challenges facing the electricity sector in Nigeria but said that the enormous and limitless opportunities in the sector were worth exploiting even as he said the Federal Government had demonstrated ample commitment by tirelessly working to create the enabling environment that would incentivise private sector investors.
Okoh said that since the agreement ‘is a win-win situation, we congratulate both parties. Indeed, we thank the duo of Interstate and Geometric Power for their cooperation in making the required compromises which have made this agreement possible.’
The Director-General tasked Geometric Power to transform Aba and Ariara Business Units into a model distribution franchise by providing 24/7 electricity supply and enabling the industrial hub to flourish.
In his remarks, the Managing Director of Interstate Electric Limited, Dr ester Enwereonu, called on Geometric Power to ensure the speedy enhancement of the infrastructure in the franchise through positive investments that would raise the ability of the company to deliver power to the consumers and expressed gratitude to the BPE and the Special Adviser to the President on Infrastructure, Mr Ahmed Rufai Zakari, for their cooperation through the process of the negotiation of the transaction.
The Managing Director of Geometric Power, Professor Barth Nnaji, thanked President Muhammad Buhari for having the political will to end the impasse and pledged to make the agreement work.
The Special Adviser to the President on Infrastructure, Mr Ahmed Rufai Zakari said the signing ceremony signalled a return of investment in the power sector in Nigeria. He commended the BPE for its commitment to eliminating challenges to transactions in its purview.
An agreement was entered into between the Federal Government, National Electric Power Authority (NEPA) and Aba Power Ltd (APL) on 28th April 2005. The parties executed a supplemental agreement on 31st August 2006. The area of coverage delineated by NEPA through the lease agreement is referred to as Aba and Ariaria Business Units, to which the initial agreement gave an exclusive right to APL to operate.
Following the privatisation exercise of the FGN in 2013, Interstate Electric acquired 60% of Enugu Electricity Distribution Company (EEDC) from the BPE pursuant to a Share Sale and Purchase Agreement dated 21st August 2013 between the BPE and Interstate (the “SSPA”) and a number of other agreements signed with them.
Subsequently, the distribution licence was issued to EEDC over five states in South-East Nigeria, whose area also included previously and exclusively licensed Aba Ring-Fenced Area granted to Aba Power Limited (APL). On this basis, EEDC became the licensee in respect of the Enugu Distribution Area while APL remained the exclusive licensee of the Aba Ring-Fenced Area, creating a conflict between the two licences.
On March 31, 2016, a Term Sheet was signed Between APL and EEDC (Interstate Electric Limited) setting out the principles that would guide the resolution of the licensing overlap as well as the sale and transfer of the Assets to the Transferees.
The National Council on Privatisation (NCP) on August 17 approved the transaction and directed the Bureau to finalise the Asset Sale Agreement between Aba Power Ltd and the Federal Government, represented by the Bureau.
