The Senate, on Wednesday, resolved to explore legal advice to review the Azura power deal signed in December 2015.
The Federal Government of Nigeria signed a take-or-pay power purchase agreement with Azura-Edo IPP, a power-generating private company, to enable it secure a $237m loan to finance its 450MW project in Edo State.
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As the arrangement continues to suffer setbacks, Nigeria would have to pay Azura $1.2 billion if it decides to exit the agreement.
The money, according to the deal, could be drawn from Nigeria’s foreign reserve.
Already, Nigeria is obligated to pay $30m monthly to Azura for power generated even if not “dispatched” – transmitted through the national grid – by the Transmission Company of Nigeria.
The Senate said it was now exploring the possibility of reviewing the agreement for the country to benefit from the money being expended.
The Senate took the position after considering the report of its Committee on Power.
The chairman of the committee, Senator Gabriel Suswam, said the Senate would need to seek the counsel of very senior lawyers to see the possibility of renegotiating the agreement.
“The agreement is not fraudulent, just that the government should not have signed it
“The danger of the agreement is that if we default, they can draw down about $1.2bn immediately from our foreign reserve,” he said.
The Senate resolved that the Cost reflective Tariffs Principle be reviewed and revisited to ensure that the electricity distribution companies pay for the full amount of power they receive from the Nigerian Bulk Electricity Trading Plc.
It also urged MDAs to make provision for payment of all outstanding debts and liabilities owed to DISCOs, as well as accommodate budgetary provision for anticipated consumption for the 2021 Appropriation year.
It also called for the immediate removal of the increased custom duties of 35 percent to allow Meter Asset Providers clear meters stuck at the port.
The Federal Government, it said, should consider an intervention that would see to the purchase of customer meters as way of fulfilling its 40 percent shareholding in the Discos.