Senate reviews Nigeria’s 2015 power agreement
There has also been apprehension in government circles over the sovereign guarantee given to Azura-Edo IPP, a power-generating private company, by the Buhari administration in 2015 to enable it secure a $237 million loan to finance its 450MW project in Edo State, The Cable newspaper hadAccording to the report, the country will have to pay Azura $1.2 billion if it decides to exit the Pull Call Option Agreement .
In addition to paying for power generated , Nigeria is also footing a yearly N5 billion bill for gas supply to Azura, even though the cost of gas is already part of the tariff approved for the plant.The chairman of the Senate committee, Gabriel Suswam, brought the details of the deal to the notice of the Senate during the deliberations.
“The implication of the agreement is that even if we are unable to take that 450 megawatts, we will still pay full price for that 450 megawatts and that is what has been happening. The agreement is called ‘take or pay’. “The way we are so tied is that the danger in Azura and ACU gas is that if we default, they can draw down about $1.2 billion immediately from our foreign reserve.
The Senate adopted a recommendation on cost reflective tariffs which should only be implemented when majority of electricity consumers have been metered .
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