$1.2bn Azura activation agreement signed by Buhari govt – Document

Fresh fact has emerged that the Partial Risk Guarantees that activated the Power Purchase Agreement between the Federal Government and Azura Power Plant was signed in August 2015.

The Senate had last Wednesday 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.


It said the payment had become statutory because of the Share Purchase Agreement signed by the Federal Government with Azura and ACU gas plants.

The Chairman of the Senate Committee on Power, Gabriel Suswam, who presented a report titled “Addressing Nigeria’s power sector problems” for debate at plenary, had said the regime of the President, Major General Muhammadu Buhari (retd.), signed power agreements with Azura to generate 450MW of electricity.

But a top Presidency official told journalists in Abuja on Sunday that the PPA preceded Buhari’s regime, having become operational in April 2013.

However, some documents on the agreement sighted by our correspondent on Monday, including one tagged ‘Key milestones from inception to date’ showed that while the PPA was executed in April 2013, the signing of the partial risk agreement tagged “Execution of World Bank Partial Risk Guarantees” was signed in August 2015 by the Buhari’s regime.

“That risk guarantee which enabled the agreement to take effect was signed in August 2015 under Buhari,” an official familiar with the agreement told our correspondent on Monday.

Our correspondent is in possession of two circulars raised by the then AGF, Mohammed Adoke (SAN), stating his objection to the agreement as drafted.

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While one of the circulars dated July 24, 2014 was addressed to the then Coordinating Minister of the Economy/Minister of Finance, Dr Ngozi Okonjo-Iweala; the second circular dated December 23, 2014 was addressed to Jonathan.

In the letter to Jonathan titled “Re: Legal opinion to Azura with respect to the put-call option agreement,” Adoke notified the then president that he had written to Okonjo-Iweala to inform her that he could not issue a legal opinion on the matter as requested by her.

He listed why he could not issue the legal opinion to include that the PCOA was executed without regards to his legal opinion of July 24, 2014; and that the PCOA failed to incorporate the indemnity clause as directed by government circular number SGF/OP/1/S3/X/737 dated August 11, 2014.

He wrote, “I wish to respectfully inform Your Excellency that I am unable to write the legal opinion to the effect that the Azura PCOA conforms to the extant laws and policies of government.

“This is because of the liability issues that may attend the execution and implementation of the PCOA if necessary precautions are not taken to safeguard the interests of government.

“May I humbly request Your Excellency to direct the Coordinating Minister of the Economy and Minister of Finance to ensure that the recommendations made to her in my legal opinion of July 24, 2014 are duly incorporated in the Azura PCOA to bring it in conformity with extant laws, policies and circulars of government.”


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