Business News Fri, 21 Sep 2018

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Gov't terminates 11 Power Purchasing Agreements signed under Mahama

Government has terminated eleven out of the thirty Power Purchasing Agreements (PPAs) signed by the Electricity Company of Ghana(ECG) during the previous administration.

This follows a recommendation by a review committee led by the Energy Commission, which was constituted by the Ministry of Energy to review all the PPAs signed by ECG.

Aside the cancellation, the Committee also recommended that eight PPAs with combined capacity of 2070 MW are to proceed without modification while four of them with a combined capacity of 1,810 MW are to be deferred to 2018-2025.

It also recommended that three PPAs with a combined capacity of 1,150MW be deferred beyond 2020.

The Minister for Energy, John-Peter who disclosed this at a press conference on Thursday, September 20, 2018, said it would have cost the nation some US$ 402.39million if the eleven PPAs had been maintained.

He said, "Pursuant to the review exercise, Government stands to make significant savings from the deferment and /or termination of the reviewed PPAs. The estimated cost of the termination is US$402.39 million, compared to an average annual capacity cost of US$586million each year or a commutative cost of $7.217 billion from 2018 to 2030. This yields an estimated savings of $6.8billion over the 13 year period."

Mr Amewu who lashed out at the John Mahama administration for engaging in what he described as reckless signing of PPAs without considering the financial implications on Ghanaians, revealed that government, is paying US$15million every month as a result of the reckless decisions by the previous administration.

According to the Minister, should the 26 PPAs with combined capacity of 8116 MW be deployed in addition, to the existing generation capacity from hydro, the VRA plants at Aboadze and Tema; and the TICO it would have resulted in a total installed capacity of about 11,000 MW.

"This will by far be more than the current peak demand of 2400MW. Even an annual growth in demand of 10%, our country will not be able to utilize this capacity in two decades," he said.

Source: Michael Creg Afful

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