Gov’t begins third round of PPA renegotiations – Kyei-Mensah-Bonsu

Government has started the third round of renegotiations of the various power purchase agreements (PPAs), caretaker Finance Minister Osei Kyei-Mensah-Bonsu has said.

Delivering the 2021 budget and economic statement on the floor of Parliament on Friday, 12 March, the Majority Leader said the “PPA renegotiations, aimed at reducing capacity charges and consequently the overall cost of power generation, are ongoing”.

“The 3rd round of negotiations has commenced following approval of the recommendations submitted by the negotiating team”, the Suame MP said, adding: “Subsequently, renegotiations were concluded with CENIT Energy Limited, and discussions with AKSA Energy Company (Gh) Limited are nearing completion”.

Also, the Minister of Parliamentary Affairs said in 2020, the country had “adequate generation capacity to meet the demand for domestic, commercial and industrial customers”.

“The 200MW Amandi Power Project was approximately 98 percent complete and is currently at the last phase of commissioning” while “phase 1A of the 400MW Early Power Project (147MW) is currently going through commissioning”.

In 2021, he noted, “the Ameri Plant will be relocated to Kumasi to help stabilize the national grid”.

Concerning other areas of the energy sector, Mr Kyei-Mensah-Bonsu said “following the approval of the Pwalugu Multipurpose Dam Project (PMDP) by Parliament, pre-commencement activities as well as the engagement of the Owner's Engineer to provide technical support to VRA to supervise and manage the EPC Contract commenced”.

He said to “strengthen our national grid”, the following projects, which are at various stages of completion, will continue in 2021;

• Lot 1 (Kumasi - Kintampo) of the 330kV Kumasi-Bolgatanga Transmission Line Project is nearing completion;

• 161kV Volta-Achimota-Mallam Transmission Line Upgrade Project has an overall works completion rate of 53 percent for the Volta-Achimota section, and 31 percent completion rate for the Achimota-Mallam transmission line;

• Remedial works on the Aboadze – Prestea 330kV Transmission Line is 90 percent complete; and

• Construction works on the A4BSP (Pokuase Bulk Supply Point) is 92 percent complete.

“Mr. Speaker, other projects to be pursued in 2021 include the construction of a new substation at Dunkwa-on-Offin, reconstruction of over-aged 161kV transmission lines from Aboadze through Dunkwa to Asawinso with higher capacity, and the reconstruction of the existing 330kV and 161kV Aboadze Switchyards”, he announced.

Additionally, he said “a total of 388 out of 560 communities were connected to the national grid under the Rural Electrification Programme”, noting: “The National Electricity Access rate increased from 84.98 percent in January 2020 to 85.17 percent by end December 2020 with over 10,000 communities so far connected to the grid”.

According to him, this year, the Ministry will “ensure and monitor the completion of ongoing SHEP-4 & SHEP-5 projects across the country”.

Various electrification projects in the Northern, North East, Savanna, Eastern and Volta, Ashanti, Western, Western North, Ahafo, Bono East and Bono Regions, among others “will also be undertaken”, he added. “766 towns will be connected under these projects in 2021”.

He said “in line with our commitment for a green economy, a total of 26MWp out of the 50MWp solar project undertaken by Bui Power Authority was commissioned on 27th of November, 2020. The remaining 24MWp and a 1.0MWp floating solar plant is expected to be completed by the third quarter of 2021”.

In the oil and gas sector, he said “total crude oil production achieved from the three producing fields totaled 66.93 million barrels from January to December 2020, translating to average daily oil production of 182,860.13 barrels. A total of 88,530.61 million standard cubic feet (MMscf) of gas, translating to average daily gas export of 241.89 MMscf, was delivered for power generation and non-power gas users”.

“In 2021, the Ministry will continue the negotiation of Petroleum Agreements and monitor activities on the Jubilee, TEN, and SGN fields. The projected production from the three producing fields in 2021 is expected to yield a total of 57.3 million barrels of oil and 93.07 billion standard cubic feet of export gas at a daily average of 156,986 barrels of oil and 254,986.30 million standard cubic feet of gas, respectively”.

Concerning the development of a petroleum hub, the Majority leader said “the Petroleum Hub Corporation Bill was passed by Parliament into law on 23 October 2020” and noted that this year “we will ensure the setup and operationalization of the Petroleum Hub Development Corporation”.

“Preparatory activities such as the conduct of a strategic environmental assessment, spatial planning, and land acquisition activities towards the development of the Hub will be continued”, he noted.