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    Nigerian Power Minister Denies Fraud Accusation

Summary

Nigeria’s power minister Babatunde Fashola has said he is innocent of an alleged fraud relating to a new power project.

by: Mark Smedley

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Natural Gas & LNG News, Africa, Corporate, Corporate governance, Political, Ministries, News By Country, Nigeria

Nigerian Power Minister Denies Fraud Accusation

Nigeria's power minister Babatunde Fashola said November 10 he is innocent of allegations made within the Senate that he had misappropriated funds for Nigeria’s Afam power plant project.  

"I state that there is no factual basis for the allegations. The ministry, my staff and I have done nothing wrong and we will collaborate fully with the investigating committee when called upon,” he said.

Fashola was accused November 2 by Senator Dino Melaye on the floor of the Senate of major fraud in the power sector. Melaye said the power ministry attempted to retrieve $350mn from a $1bn Eurobond issue raised by the federal government in July 2013 and to divert the same to its so-called Fast Power Projects on which the ministry has already spent $35mn of public funds without National Assembly approval. Questions like the observance of due process in awarding the consultancy of $6mn and in paying US giant GE $29mn for gas turbines were also raised by members of the National Assembly.

The Senate passed a motion asking the Senate Committees on Power and Public Accounts to invite Fashola to render a detailed account in terms of: public funds spent on Afam Power plant; the evidence of feasibility study indicating the viability of the projects; the requisite approval by the National Assembly; and the controversial Presidential approval. It also asked both committees to investigate the Nigerian Sovereign Investment Authority (NSIA) and establish the status of the funds.

The motion also mandated the Senate Committee on Public Accounts to ascertain the whereabouts of the balance of $650mn in NSIA’s custody. The latter had said November 6 that the $350mn had been invested and is accruing interest.

Fashola said that he was not a minister in 2013 when the Eurobond was issued and pleaded with the Senate to stop making assumptions which could affect investor confidence in the gas sector. He also told reporters that the Afam project was kick-started as an investment by GE to boost Nigeria’s power supplies.

"They offered to do this by providing Nigeria with mobile turbines of 600MW if we could find a location with gas and [power] transmission evacuation infrastructure. The Afam Power Station fitted that description … but all its turbines had been virtually run down,” the minister said adding: “The investment was contingent on paying $27.99mn which was 15% of eight units of 30MW turbines each totaling 240MW valued at about $186.6mn. Payment of the $27.9m was made without breaching any law.”

He said the turbines had recently arrived in Nigeria and were currently at the Onne Port, which could be verified, as could ongoing works at the Afam site itself. 

In June 2017, NGW reported that Fashola told reporters that the Afam power project would be revamped to increase the plant's capacity to 340 MW after funding had been found to fix faulty turbines and enable gas companies to supply gas to its turbines.

 

Omono Okonkwo