Nigeria’s largest independent power plant (IPP), Azura Edo Power Plant, is a huge suction pipe set up to siphon millions of tax-free dollars through a network of Mauritius-incorporated offshore shell companies to a number of trusts and private equity firms, an investigation by PREMIUM TIMES and the International Consortium of Investigative journalist (ICIJ) has revealed.
A study of the data obtained by German newspaper, Suddeutsche Zeitung, and ICIJ from two offshore secrecy providers (Appleby and Asiaciti Trust) and 19 secrecy jurisdictions showed that promoters of the power plant will earn as much as $28 million before the first light bulb comes alive from power generated by the facility.
The 1.4 terabyte leaked data, now named Paradise Papers, contains 13.4 million records and ranks among the biggest leaks in history.
For 12 months, more than 380 journalists from 96 media organisations in 67 countries pored over the gigantic data, which cover a period of nearly 70 years, from 1950 to 2016. PREMIUM TIMES is the only Nigerian media organisation involved in the investigation.
More than 120 politicians and country leaders, in nearly 50 countries as well as hundreds of business people across the world were identified in the record as users of offshore entities.
The beginning
In October 2014, former President Goodluck Jonathan, a spade in hand, flanked by Adams Oshiomhole, then governor of Edo State, and other dignitaries broke the earth of the sprawling 100 hectares site for the Azura Edo Power Plant for the first time.
The power plant, located at the Ihovbor/Orior Odemwende communities outside Benin City was hailed as the first fully financed private power plant in Nigeria.
The first phase of the IPP, which is planned to take off in 2018, will produce 450 megawatts of electricity but ultimately, the plant is expected to produce 1,500 megawatts.
Mr. Jonathan said the project demonstrated the “strong foundation” on which his administration was “building a sound and sustainable electricity industry, with great expectations for robust growth in the sector.”
Azura Edo was an instant hit with foreign investors and multilateral financial institutions. The gas-fired plant had little problem generating the $1 billion ($700 million for the construction of the plant and $300 million to build associated infrastructure) required to set it up.
The World Bank provided a partial risk guarantee of up to $245 million. The board of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) approved loans and hedging instruments of up to US$135 million and guarantees of up to US$659 million.
The project received loan financial backing from First City Monument Bank, Rand Bank of South Africa, Standard Chartered Bank, United Kingdom and the Netherlands Development Finance Company (FMO).
Other financial institutions that provided debt financing were Standard Bank of South Africa, SWEDFUNDS International, AB, Sweden, and Overseas Private Investment Corporation, USA.
But after the funfair of the groundbreaking ceremony, work on the project stalled. The Mr. Jonathan’s administration, for undisclosed reasons, withheld its backing of the World Bank facility needed for the plant to take off.
In August 2015, however, the President Muhammadu Buhari administration breathed new life into the plant, signing a $237 million risk guarantees with the World Bank in support of the power plant. The guarantees included a debt mobilization guarantee of $117 million and a liquidity guarantee of $120 million.
