Some industry watchers have urged the federal government to respect the sanctity of contracts as it concerns the $1 billion investment by the Azura Edo Power plant, saying any action to the contrary might negatively impact the credibility of the sector.
The House of Representatives Committee on Finance had recently said that the Nigeria Bulk Electricity Trading Company, (NBET) dragged the country into a Power Purchase Agreements (PPA) that was detrimental to the interest of the country.
The Azura plant has an output of 461 megawatts and contributes over 10 per cent of the daily electricity generated into the grid.
The agreement with the firm by the federal government was to the effect that Azura would evacuate the total energy being generated by the company or the government will bear the risk for such generation.
But the distortions in the country’s transmission capacity has remained a key barrier to the agreement, impacting government’s revenues negatively anytime it is unable to wheel the generation from the company.
It was learnt that the loss under the Pull Call Option Agreement (PCOA) sometimes runs into $30 million monthly.
An industry expert, Mr Bode Fadipe, argued that whether it was a legally enforceable contract or a gentleman’s agreement, the sanctity of contract was critical for economic growth and development in any economy.
Also, the President Nigeria Consumer Protection Network and Member, National Technical Investigative Panel on Power System Collapses, System Stability and Reliability, Kola Olubiyo, said the prevailing development shows that the National Assembly may not have the full grasp of how the sector runs.
Last week, the House Committee summoned the Managing Director of the Transmission Company of Nigeria (TCN), Sule Abdulaziz, over the controversial power plant agreement.
Under the PCOA deal, Nigeria is obligated to pay between $30 million and $33 million monthly to Azura for power generated, whether the TCN transmits it or not through the national grid.
