Residents of Eastern Nigeria’s industrial hub of Aba are still jubilating over the 24-hour power supply that Geometric Power will now bring to them after years in which mindless politics threatened to scuttle the country’s first-ever Integrated Power Plant.
Geometric Power, owned by a professor of engineering and former minister of power, Barth Nnaji, had been prevented from keeping its promise of lighting up Aba after vested interests, crony capitalists, an inept bureaucracy putting up barriers to doing business and murky dealings traceable to the very top of Nigeria’s political class combined to delay the 181 megawatt power plant.
The plot to stop Geometric was at the time enabled by a hapless president, a vice president captured by vested interests and a defanged Bureau of Public Enterprises (BPE).
Also playing a starring role in grounding the Aba power project was a National Electricity Regulatory Commission (NERC) where conflicting interests had led to deceit, and a private sector entity – Interstate Electrics, owners of Enugu Disco – whose intent was essentially to kill Geometric.
It was a tale with few heroes but lots of villains, who conspired to keep the city of 2.5 million people perpetually in the dark.
Emeka Offor, the chairman of Chrome Group and promoter of Interstate Electrics Limited, who was a close friend of Namadi Sambo, Nigeria’s Vice President at the time, was said to have frustrated the operation of the power plant primed to deliver uninterrupted power supply to Aba, a shoe and garment hub in Africa.
The sheer misanthropy that accompanies Nigeria’s version of barefaced political brigandage and patronage had left households and industries in entrepreneurial Aba, the “Japan of Africa”, trapped under increasing blackouts.
Households in the South East experienced blackouts several times a month.
In 2000, the combined turnover of the shoe and garment industry of Aba, the third-largest commercial city in Nigeria, was $200 million.
Offor who was blocking the project had Pius Anyim, secretary to the government of the federation, in his pocket, while Sam Amadi, the -chairman/CEO of NERC, was beholden to Anyim.
Benjamin Dikki, director-general of the BPE, and Mohammed Bello Adoke, attorney-general, were also marionettes of the vice president.
Together, they managed to pull the wool over the eyes of former President Goodluck Jonathan, keeping him out of the loop with spurious procedural and legal issues.
Their delay tactics slowed down the take-off of a project financed by a consortium of American investors, local and international banks, as well as the International Finance Corporation (IFC), the World Bank’s private-sector arm.
In 2001, after the successful execution of the 22 megawatts (MW) emergency power station in Abuja to serve a dedicated distribution network within the Federal Capital Territory, Nnaji, founder of Geometric, was inspired to initiate the Aba Integrated Power Project, a distribution project with an embedded generation company.
In 2004, Geometric Power Limited signed a memorandum of understanding with the Federal Government to build a power plant in Aba, and a year later, in April 2005, Geometric signed the Aba concession agreement, also with the Federal Government, which gave it the right to distribute power to Aba.
The government, NEPA and APL executed a lease agreement on April 28, 2005 for the distribution of power to the ring-fenced residential and commercial consumers at Aba.
By the terms of the agreement, NEPA assigned its right to distribute electric power in the ring-fenced island of Owerrinta, Osisioma, Ogbor Hill, Factory Road, and Port Harcourt Road in Aba, and also leased its distribution facilities within the contract area.
Despite the huge promise it held not only for Aba but a country where stable power was elusive and officials were scouring for templates to keep the lights on across the country, it appeared as though Geometric Power would never light up Aba as the politically-influential Emeka Offor stood in the way.
Geometric had been licensed in 2005 to deliver power supply to Aba and Ariaria business units, just two out of 18 business units in the Enugu Disco licence areas.
However the Bureau of Public Enterprises (BPE) sold EEDC to Emeka Offor’s Interstate Electrics without excising Aba from the sale thereby causing friction between Interstate Electrics and Geometric.
The backing of then Vice President Namadi Sambo titled the balance in favour of Offor’s Interstate Electrics.
According to knowledgeable sources, the former vice president had vested interests in Interstate Electrics and wanted the company to end up buying Enugu Disco.
The Sambo-led National Council on Privatisation (NCP) bent the rules of the privatisation of the Power Holding Company of Nigeria (PHCN) successor companies, when Interstate Electrics failed to meet the August 21 deadline for the payment of the remaining 75 percent of the bid value.
The company was said to have lobbied the NCP and BPE to get them to grant it an extension to pay for the asset, for which industry analysts said there was no moral justification, when similarly some investors were shut out at the preliminary stages in the same circumstances.
Until it got to Interstate Electric’s inability to make any payment at the August 21, 2013 deadline , the NCP and the BPE did not allow any exception. Even when Dangote was a few minutes late in submitting its bid for Geregu and Shiroro, it was disqualified.
In November 2012, the vice president had, through a memo, directed the BPE headed by Bola Onagoruwa to disregard the 2014 Memorandum of Understanding with Geometric Power, and the 2005 and 2006 lease agreements which ring-fenced Aba and Ariaria business units in favour of Geometric, but because she insisted that the contract should be honoured, she was asked to quit ‘with immediate effect’ on November 27, 2013.
Analysts described the development at the time as curious in terms of the timing and very disturbing from an investor perspective.
In suit number FHC/ABJ/CS/106/2013, filed at a federal high court in Abuja, Geometric sought to restrain BPE from listing the two business units among government-owned companies slated for privatisation, as selling or privatising the entire Enugu Disco contravenes the existing agreements between the Federal Government and Aba Power Limited and Geometric.
In another suit number FHC/ABJ/CS/106/2013, Interstate Electrics Limited sought to be joined in the case instituted by Aba Power Limited and Geometric Power Aba Limited against the BPE.
In the understanding that an out-of-court settlement would be the best option for settling the dispute, the National Council on Privatisation (NCP) set up a peace committee.
In its report, obtained by BusinessDay, the NCP committee admitted that “BPE indicated that Aba ring-fence was encumbered, yet it included Aba ring-fence in its bid and that Aba ring-fenced area belongs entirely to Aba Power Ltd with its generating power responsibilities”.
A report by NERC, after a visit to the Geometric Power infrastructure in Aba, submitted that “it will be a disservice to the country in general and the company (GPAL ad APL) in particular, after investing such a huge amount of money on power infrastructure, to be denied the terms of the tripartite agreement. A disregard of the agreement will cast a bad light on the Federal Government’s privatisation process and send a wrong signal to other prospective investors in the power sector”.
In February 2014, a team from the Federal Ministry of Power, led by the permanent secretary, after visiting Aba, submitted that “the sanctity of the lease agreement of 2004 and the supplementary agreement of 2006 between the Federal Government and Geometric Power be respected and maintained”.
Several promises by former President Goodluck Jonathan to resolve the matter never materialised and it was until 2020 during the Muhammadu Buhari administration that the impasse was resolved.
Described as the biggest investment in the Southeast, Geometric Power has spent some $800 million dollars on its integrated power project, which includes building a 27-kilometre natural gas pipeline from Owaza in Ukwa west LGA in Abia State to the Osisioma Industrial Layout in Aba.
Nnaji disclosed as far back as 2015 that his firm paid $3.5 million monthly as interest on the $500 million borrowed from Diamond Bank and other Nigerian financial institutions.
Geometric Power’s Aba project may be a case of better late than never but its dark side surely leaves more to be desired.
