The lingering tussle over who owns the Aba ring-fenced area between Geometric Power and Interstate Electric( Owners of the Enugu Electricity Distribution Company (EEDC) has finally been laid to rest with the signing of the Asset Sale Agreement (ASA) between the two companies.
At the signing ceremony on Wednesday, November 26, 2020 in Abuja, Director General of the Bureau of Public of Enterprises (BPE), Mr. Alex A. 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 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. Kester Enwereonu called on Geometric Power to ensure 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 though the process of the negotiation of the transaction.
The Managing Director of Geometric Power, Professor Barth Nnaji, thanked President Muhammedu 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 signaled 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.
It would be recalled that 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 31stAugust, 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, which 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 31st March 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 17th August, 2020 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.