The President Muhammadu Buhari-led government has reacted to the presentation of the Chairman of the Senate Committee on Power, Gabriel Suswan, presented before the Senate for debate at plenary.
The lawmaker in his statement had claimed that the current government signed power agreements with Azura to generate 450MW of electricity.
A top presidency official while speaking with newsmen on Sunday noted that the Power Purchase Agreement became operational in April 2013 before the Buhari regime.
The Senate had questioned the decision of the federal government to pay the sum of $30m for power monthly and resolved to assemble local and international experts to review the agreement.
The Senate said the payment had become statutory because of the Share Purchase Agreement signed by the Federal Government with Azura and ACU gas plants.
A newspaper had noted that the Vice-President, Yemi Osinbajo, who heads the Presidential Power Reform Transaction; and Mr Babatunde Fashola, who was in charge of power as of the time, could be targets of the proposed review by the Senate.
The Presidency official, who spoke on condition of anonymity, noted that the deal was signed by the Goodluck Jonathan government and the Vice President and Fashola did not feature in the agreement and did not sign any contract.
He said, “Records show that the Power Purchase Agreement for the transaction in question was signed on April 22, 2013, during the tenure of the then President Goodluck Jonathan.”
The source further stated that top Federal Government officials would be communicating with the Senate to clarify this misconception.
He added that there was nothing wrong in the Take or Pay Clause in the PPA, which obliges the Federal Government to pay for power declared available by the company, whether or not it is taken by the government-owned Transmission Company.
“It is fairly standard, especially where, as in this case, the plant is a huge one requiring enormous set-up cost and the country is in dire need of the power.”
“Nobody would build a power plant, which is a very costly and capital-intensive venture, and no lender would put money in one unless someone had committed to pay for the power.”
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