The Special Adviser to the President on Infrastructure, Mr Ahmed Zakari, said on Wednesday that no documents signed from 2013 to 2015 stated that Nigeria would be liable to pay $1.2bn if it defaulted on the contract for the Azura-Edo Independent Power Plant.
The Chairman of the Senate Committee on Power, Gabriel Suswan, had said last week that the regime of the President, Major General Muhammadu Buhari (retd.), signed power agreements with Azura to generate 450 megawatts of electricity.
The Senate had expressed concern over the monthly payment of $30m by the Federal Government for power and resolved to assemble local and international experts to review the agreement.
Zakari, in a statement entitled ‘Partial risk guarantee not an issue in Azura-Edo IPP contract, says Presidency’, said, “Clearly, the controversy as to who signed the agreements has no real basis, if indeed the only quest is for the plain truth.”
He said those who argued that the signing of the World Bank guarantees made the Federal Government under Buhari responsible for contracting Azura needed only to look at the two basic transaction documents.
He said, “Another curious mischief in this controversy is the assertion that Nigeria will become liable in the sum of $1.2bn if it defaults on the Azura contract. Nowhere in any of the documents signed from 2013 to 2015 is any such figure mentioned.
“The only possible payout indicated in any of the agreements is in case the put and call option is activated.
“In that event, the cost of the plant would be worked out using a formula and become due for payment, but at least Nigeria will get in return a functional 461MW plant.”
Zakari said 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.