The Azura Power Plant in Edo State consistently generates 452 megawatts (MW) daily to the national grid and pays over 40 per cent of its energy invoice receipt to the government for gas and loan from the Central Bank of Nigeria (CBN).
The Managing Director of Azura, Mr Edu Okeke, stated this on Thursday at the plant while clarifying a $30 million monthly invoice payment from the Nigerian Bulk Electricity Trading Plc (NBET).
The House of Representative Committee on Finance recently queried the payment. But Mr Okeke said five GenCos that have active 20-year Power Purchase Agreements (PPAs) with NBET “Get capacity charge and energy charge, and not only Azura.”
He said, “About 40 per cent of the payment goes back to the government as loan repayment to the Central Bank of Nigeria (CBN) through the Bank of Industry (BoI); part to the Nigerian Gas Company (NGC), NNPC Ltd through its Nigerian Petroleum Development Company (NPDC) and its partner Seplat Energy.”
Okeke said the only difference in Azura’s payment promptly to recover the $900 million investment is the World Bank’s Partial Risk Guarantee (PRG), enabling the Federal Ministry of Finance, Budget and National Planning to augment whatever NBET gets from the Distribution Companies (DisCos) monthly to make up 100% of its invoice.
“We pay them from this invoice when we collect the money monthly, and we pay our taxes regularly; so we get $30m in but naira from NBET monthly as our payment but 40% goes back to the government by way of gas and loan repayment.”
On how the Ministry of Finance may stop intervention in paying Azura, the GenCo boss said: “The problem is about the DisCos and the government needs to tackle it so that the sector’s liquidity will improve.”
He commended President Muhammadu Buhari’s administration for concluding the Azura financing process. “We are grateful to this administration because they came in, investigated the Azura project process and they cleared it and gave us a legal opinion.”
According to him, the financiers include the Development Finance Institutions (DFI) of the United Kingdom, the United States, Germany, France, Sweden, the Netherlands, and the World Bank.
He said upon receiving the legal opinion around October 2015 by the solicitor general, construction began on January 4, 2016, was supposed to be 36 months.
“But because of the efficiency of the project, we finished eight months ahead of the completion timeline, which was in May 2018. That was when the commercial operation started. And finishing eight months ahead of time was the first of such in Nigeria and without variation of contract.”