Governor Otti’s vision of independent, stable power supply and distribution to all parts of the State nears realisation as the faculty of consultants engaged by the State Government to carry out extensive due diligence on the planned acquisition of Interstate Electrics Limited’s 60% stake in Enugu Electricity Distribution Company (EEDC) assets in the Umuahia zone presented their initial report.
Reacting to the due diligence report presented on Friday, 14th February, at the Governor’s office by four reputable organisations that handled different aspects of the assignment: Deloitte and Touche (Lead Consultant and Financial-Tax-Commercial Adviser), Ken Ahia SAN & Associates (Legal Adviser), Kosem Nigeria Limited (Technical Adviser), and Heritage Capital Markets Limited (Accounting Experts) in the presence of Afriexim Bank (Financier), Governor Otti underscored the importance of ensuring a fair deal, both for the Government and the Seller, Interstate Electrics Limited.
“We want to land a fair asset value for the government and the seller. I have maintained that it would be a different discussion if we don’t have the money; however, we can always source the funds, underscoring the reason for Afrexim Bank’s attendance. The government does not plan to hold 60%; we can lead the way with the acquisition, de-risk, and subsequently divest into other potentially interested private sector players. We felt that is a better way to go than inviting some private sector….
“If you go back to check, you will find virtually all the DISCOs are struggling; the reason for the struggle is a discussion for another day. Some of the DISCOs were overvalued, while others were very expectant. Post-acquisition, they discovered that maybe the major problem was not what they thought it would be.
“One of the key issues is generation, another issue is transmission; you can’t distribute power that is not available to you. And it is actually the driving force here for us because we can see excess capacity from Aba,” the Governor explained.
Governor Otti recalled his visit, with the European Union (EU) delegation, led by the EU Cooperation Chief, Mr. Massimo De Luca, to Geometric Power, Aba, on Thursday, 13 February, stating that instead of wheeling excess power to the national grid, it is better to wheel it into Umuahia to solve our domestic problems.
“For me, it is a transaction that we must do, and the question is how do we safely do it, leaving everybody happy? That is why we are doing all these. I have an idea of a number that Interstate Electrics is looking at, but you can’t just hit a hand on your head and quote a random asset value; it needs to be derived, and that’s why all of you are in the room, and that’s why I devoted this time just to listen,” the Governor stated.
The Governor thanked the team for working with the State on the acquisition process, saying that, it would do so much with Geometric Power currently producing 75 MW, which is less than 50% of the current capacity of 188MW. After solving the gas supply-related problems, Geometric can wheel power to the Umuahia Zone once the functional Infrastructure is in place, making the project viable. Governor Otti noted that it is an experiment that has not been done anywhere in Nigeria but is already working here in Abia.
The Abia State Government team, comprised of the Honourable Commissioner for Power and Public Utilities, Engr Ikechukwu Monday, Honourable Commissioner for Finance, Mr. Uwaoma Ukandu, Special Adviser to the Governor on Energy, Engr. Kachy Etolue, Director-General, Ministry of Finance Incorporated (MOFI), Mr Osinachi Nwaka, Technical Assistant to the Governor, Mr Charles Egonye and representatives of Afriexim Bank, took their time to interrogate the Consultants who responded to the questions and concerns raised and took some feedback to be addressed ahead of the submission of the final Due Diligence Report in the coming days.
The Umuahia ring-fenced area covers Umuahia-North, Umuahia-South, and Ikwuano in Abia Central zone of the State and the entire five Local Government Areas of Abia-North Zone – Arochukwu, Bende, Isiukwuato, Ohafia and Umunneochi. Geometric Power presently supplies power to Aba and its environs comprising Aba-North, Aba-South, Isiala Ngwa-North, Isiala Ngwa South, Obingwa, Osisioma, Ugwunagbo, Ukwa-East and Ukwa-West LGAs, the entire Abia-South Zone of the State and parts of Abia-Central.
Ctz. UKOHA NJOKU UKOHA
Chief Press Secretary to the Executive Governor of Abia State.
15-02-2025.
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