Victor Ezeja
After a protracted court battle that lasted for nine years between Geometric Power and Interstate Electric over ownership of the Aba ring-fenced area, the former finally acquired the power asset.
Ring-fence, as an investment parlance, represents a virtual barrier to segregate a portion of financial assets from the rest with a view to reserving money for a specific purpose, reducing taxes on a company or protecting the assets from losses from riskier operations.
Chairman/founder of Geometric Power Limited, Engr Bath Nnaji said the company has paid $26 million re-acquisition price for the facility.
Join our WhatsApp ChannelAt a brief event in Abuja, the National Council on Privatisation (NCP) through the Bureau of Public Procurement (BPE) handed over the asset to Geometric Power.
Interstate Electric, a core investor in Enugu Electricity Distribution Company (EEDC), was embroiled in serious legal war with Geometric Power which affected development of the facility, preventing people of Aba region from enjoying regular power supply.
The two companies had, in November 2020 at Abuja, signed the Asset Sale Agreement (ASA) which was overseen by the BPE.
It is believed that the transfer of the asset to Geometric Power would open a new vista in service delivery and improved power generation in the Aba area.
Speaking on the development, Nnaji said the company would introduce a new vista of electric power resource management not just in the Aba area but also in the entire country.
Director General of BPE, Alex Okoh, said that midwifing the asset transfer was one of the ways the Federal Government works towards ensuring a reform of the power sector.
Okoh expressed his confidence in the transaction, noting that it would be a big leap in revenue drive for the federal government.
Speaking on the resolution of the conflict between the companies, the BPE DG said successive administrations since 2005 found it difficult to resolve the rift, but it became a top priority of the current administration which initiated series of engagements with various stakeholders on the matter.
“In order to achieve this, the Bureau initiated a series of engagements with all the stakeholders, which led to: the signing of the Term sheet between Geometric Power and Interstate Electric Limited (which is the Core Investor in Enugu Electricity Distribution Company (EEDC); and an agreement between the Federal Government, Geometric Power and Interstate Electric Limited on the principles that would guide the resolution of the licensing overlap between EEDC and Geometric Power, as well as the sale and transfer of the Asset by EEDC to Geometric Power.
“Following the approval of the transaction by the National Council on Privatisation, the Bureau (on behalf of the Federal Government) and Interstate Electric Limited executed an Asset Transfer Agreement, through which they transferred their respective interests in the Aba Ring Fence Area to Geometric Power,” Okoh stated.
He described Geometric Power as “a very tenacious investor who has made a firm commitment to transform the Aba ring-fence area into a model electric supply franchise, providing quality, stable and appropriately priced electricity to consumers, thereby unlocking the significant economic benefits of this commercial and industrial hub of the regional and national economy.”
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
It is a welcome development