The Presidency says there are grave consequences for Nigeria if President Muhammadu Buhari decides to cancel an agreement binding the country and Azura-Edo Independent Power Project.
The Special Adviser to the President on Infrastructure, Ahmed Rufa’i Zakari, in a statement on Wednesday, said cancelling the agreement “is similar to P&ID cases.”
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Zakari recalled that in the case of P&ID, the Federal Government was sued for breaching the terms of a contract to build a gas processing plant.
He said despite the fact that no part of the plant was ever built and no government or World Bank guarantees were given, the Arbitral Tribunal found Nigeria liable in the sum of $9.6 billion.
He said because “there was already a valid and binding contract between the Federal Government and Azura-Edo, that would have led to an international case similar to the P&ID scenario”.
“Over the past week, there has been an unnecessary controversy about the Azura-Edo Independent Power Project (IPP) especially the concerns about who signed the transaction documents and who did not sign, thus ignoring the consequences of backing out of the agreements by the Federal Government.
“The Azura-Edo IPP is a functional 461MW power plant. It is owned by a group of investors led by an internationally reputed firm – Actis and includes the Edo State government as part of the investment consortium.
“Today, the plant supplies over 8% of the power on Nigeria’s National Grid. Clearly, the controversy as to who signed the agreements has no real basis, if indeed the only quest is for the plain truth.
“Since the Buhari government had chosen not to repudiate the deal, it went ahead to issue the required legal opinion and signed the World Bank guarantees that had been initiated in April 2014. In fact, the main Power Purchase Agreement was signed in 2013,” he said.
