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Geometric Power, the initiator of the Aba Independent Power Project, has set records straight regarding the equity investment of the Abia State government in the deal.
Geometric Power, in a letter dated February 28 and signed by its Chairman and Chief Executive Officer, Prof Barth Nnaji, explained that Abia state government, under Dr Okezie Ikpeazu as Governor, indicated interest to acquire 3.5 per cent stake for N1.97 billion.
He explains: “I was under the impression that it was included in the handover note to your administration. Having found out from you that it was not, I hereby formally provide clarity to the investment for your government’s records
“In 2020 when Geometric Power needed to raise additional equity in order to complete the funding gap for the Aba IPP, the Abia State government under Gov Ikpeazu’s administration indicated an interest to take 5% equity at the base nominal rate of $1m for 1% equity position in the project.
“This was the standard rate for all the investors. The government officials insisted that they would pay for the equity in naira, and at the CBN rate of N395.00 to $1 for a total amount of N1.97billion at that time. However, the government paid only N1.4billion for 3.5% equity position in the project.
The government was not able to pay the balance before the deadline and subsequent
financial closing date for the transaction. Geometric Power therefore was compelled to make up the balance through other sources, as the lenders insisted on the complete equity capital being fully funded before the Aba IPP could be funded by the bank.
“We remain grateful and appreciative of the support that you and your government have been giving to the project”.
