The Federal Government has resolved to formally engage the Senate with a view to clarifying some perceived misconceptions that featured last week when the Chairman of the Senate Committee on Power, Gabriel Suswan, presented a report titled, “Addressing Nigeria’s power sector problems” for debate at plenary.
Suswan had said the regime of the President, Major General Muhammadu Buhari (retd.), signed power agreements with Azura to generate 450MW of electricity
But a top Presidency official told journalists in Abuja on Sunday that the Power Purchase Agreement became operational in April 2013 before the Buhari regime.
The Senate had expressed concern over the monthly payment of $30m by the Federal Government for power and resolved to assemble local and international experts to review the agreement.
The Senate said the payment had become statutory because of the Share Purchase Agreement signed by the Federal Government with Azura and ACU gas plants.
A newspaper (not The IS NAIJASPAM) had said Vice-President Yemi Osinbajo, who heads the Presidential Power Reform Transaction; and Mr Babatunde Fashola, who was in charge of power as of the time, could be targets of the proposed review by the Senate.
But the Presidency official, who spoke on condition of anonymity, said since the agreement preceded the Buhari regime, Osinbajo and Fashola did not feature in the agreement and did not sign any contract.
He said, “Records show that the Power Purchase Agreement for the transaction in question was signed on April 22, 2013, during the tenure of the then President Goodluck Jonathan.”
He said top Federal Government officials would be communicating with the Senate to clarify this misconception
He added that there was nothing wrong in the Take or Pay Clause in the PPA, which obliges the Federal Government to pay for power declared available by the company, whether or not it is taken by the government-owned Transmission Company.
“It is fairly standard, especially where, as in this case, the plant is a huge one requiring enormous set-up cost and the country is in dire need of the power.
“Nobody would build a power plant, which is a very costly and capital-intensive venture, and no lender would put money in one, unless someone had committed to pay for the power,” the official said.