Document Reveals Abia’s $3.56m Investment in Geometric IPP

Emmanuel Ugwu-Nwogo in Umuahia

It has emerged that Abia State government actually paid N1.42 billion (equivalent of $3.56m then) as equity stake in the recently inaugurated Aba integrated power project (IPP) owned by the Geometric Power Group.

The amount was part payment for $5 million (N1.975 billion) equity stake offered to Abia State, leaving a balance of N565 million or $1.44 million (at prevailing exchange rate at period of transaction).

It was reliably gathered at the weekend that the Chairman/CEO of Geometric, Prof. Barth Nnaji had written to Governor Alex Otti to confirm the transaction, in response to the governor’s request to verify the claims by the immediate past administration.

Further evidence that Abia has equity stake was contained in a letter dated August 24, 2022, which Nnaji wrote to former Governor of the State, Okezie Ikpeazu, acknowledging part payment of Abia’s five per cent equity share and then requested for conclusion of the deal.

He had written: “We like to please request that you complete the journey that started so well. This is in regard to the equity contribution of Abia State for equity stake of five per cent in the project.

“You may recall that the amount for this five per cent was agreed for a price of $5 million. Abia State Government insisted that it will obtain this stake in naira at the rate of N395 to $1 which was CBN rate at the time.

“Out of the N1,975,000,000 required. ABSG paid the sum of N1.41 billion remaining N565 million.”

The authenticity or otherwise of Abia’s equity stake in the Aba IPP sparked controversy in the run-up to the inauguration ceremony when the immediate past administration revealed that it had paid N1.56 billion worth of shares for the State.

However, officials of the present government had cast doubts on the claim by the Okezie Ikpeazu government, insisting that no documentary evidence was left behind by the last administration to justify the claim.

The Commissioner for Information and Culture, Okey Kanu, had told journalists after the State Executive Council meeting last Monday that, “at the point of handover, there was no evidence of financial transaction between Abia government and Geometric.”

Corroborating the Commissioner, the Special Adviser on Media and Publicity, Mr. Ferdinand Ekeoma, had said, “at this point we don’t have any documents or information.”

“To the best of our knowledge there is nothing to show for it(the said payment for equity share),” he had said, adding that, “as a government we will actually be happy to know that something was invested.”

“We will need to have a document before we can go to Geometric and begin to ask for it(Abia’s investment),” he added.

It was the Commissioner for information in the Ikpeazu government, Chief John Okiyi Kalu that came out to explain that the government had actually paid N1.56 billion to Geometric out of the N1, 975, 000,000 worth of 5 percent shares allotted to Abia.

“Going by the applicable exchange rate of N395 to $1, that payment amounted to $3,569,620.02 or 71 per cent of the allotted five per cent shares in Geometric Power as at that time,” he said in a statement made available to the media.

Kalu, who last served as Commissioner for Trade and Investments, argued that it was wrong to dismiss with a wave of the hand both the investment and efforts put in by Ikpeazu to assist Geometric overcome its teething problems.

He said: “This (equity share) payment is besides other material and non-material contributions of the Ikpeazu-led administration to ensure that the project took off, including committing state resources to introduce and promote the company before international investors such as Afreximbank that later availed the sum of $50 million to Geometric Power.”

Kalu, also noted that the former Abia governor extended, “massive goodwill and political leverage to ensure that the debilitating rift between the company(Geometric) and EEDC was settled through the office of then Vice President Yemi Osinbajo.”

He said since the Ikpeazu administration didn’t complete the equity payment, the present Abia government, “can also pay the balance of $1.4 million to achieve the five per cent equity stake if indeed they still believe the company is viable in the short and long run.

“But, if in their own estimation, they think it is not viable then they should recover the money in dollars, use it to buy and distribute free transformers across the state,” Kalu stated.