General News Tue, 29 Oct 2019
Ghana’s biggest opposition National Democratic Congress (NDC) deserves being in opposition for, at least, 24 years for messing up the country’s energy sector, the founder of Danquah Institute, Mr Gabby Asare Otchere-Darko has said.In the President’s cousin’s view, Ghana is better off with the NDC and its flag bearer Mr John Mahama being in opposition for a long time.
“I heard the NDC complaining about Ghana losing $190 million (or even potentially more) from the USA over the ECG concession issue, when, by their misdeeds, we are throwing away $500 million a year for power we don’t use”, Mr Otchere-Darko wrote on Facebook, adding: “Thanks to this same Mahama NDC and the power purchase agreements they signed, total capacity charges for the IPPs annually is around $850 million”.
“Yet, on an average, we use less than 40% of all that power! This is what puts the amount we spend annually for excess capacity (what we pay but don’t use) at $500 million! The curse of unbridled take-or-pay deals by a government that used the excuse of dumsor to create another crisis.
“With deals like this, I guess we should rather have put the NDC gov’t out on an OSP (Opposition Sector Participation) concession for at least 24 years!”, he wrote.
According to him, the Minister of Finance, Mr Ken Ofori-Atta, has inaugurated the Energy Sector Recovery Programme Steering Committee “to help drive the collaborative consultation process between the government and each Independent Power Producer in an effort to resolve the excess capacity issues the NDC created and left behind”.
“The objective of these crucial negotiations is to find a fair outcome to all stakeholders, investors, government and consumers. Another worthy effort by Akufo-Addo to clear another legacy mess by Mahama”, he added.
Just on Monday, 28 October 2019, the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDiB) issued a statement calling on the Akufo-Addo-led administration to pay the $1.5 billion debt owed them to guarantee uninterrupted power supply.
In a statement signed by its CEO Mr Elikplim Kwabla Apetorgbor, the Chamber said its members expected the delays in payment to end with the introduction of private sector participation in the distribution of electricity when Power Distribution Service Ghana Limited came on board but that has not happened.
“Sadly, the reality we have experienced is that the receivable accounts position of the independent power producers has deteriorated since the PDS arrangement came into effect,” the statement said.
Mr Apetorgbor explained further that: “When on the 8th of July 2019 the CIPDiB issued a statement about having gone for four months without any payment, PDS came out in rebuttal, claiming they had honoured their obligations to ECG. This was later found out to be untrue.
“The cumulative outstanding debt position of the GoG/ECG to IPPs alone has escalated to about USD$1.5 billion.
“The CIPDiB is, once again, compelled to ask that payment of the obligations of GoG/ECG be made as a matter of urgency. Immediate disbursement from funds that have been built up in the PDS accounts is essential to enable us to continue to produce”.
Below is the full statement
Strengthening the power sector – a national priority.
Strengthening the power sector, particularly the electricity distribution sub-sector, was a key rationale for private sector participation in ECG. The technical and financial capability of the selected private sector partner would address the need for additional investment in the distribution system complementing the US$500 million that would be provided by the Millennium Challenge Corporation (MCC).
For us, members of the Chamber of Independent Power Producers, who provide over 2500MW reliable power generation capacity (representing over 60% of the total generation in the power sector of Ghana), there were assurances that with private sector participation in ECG, delays in being paid for the power we generate would be a thing of the past. During countless stakeholder engagement sessions, MiDA and its Transaction Adviser, the International Finance Corporation (IFC), trumpeted these anticipated benefits of private sector participation.
It was indicated that, under the concession arrangement, the concessionaire would be paying in full all invoices of the power producers within 10 days.
The concessionaire was also to put in place a revolving letter of credit which could be called upon on the 11th day for settlement of the invoices.
Furthermore, the concessionaire was expected to replenish the revolving letter of credit in two weeks to ensure that there was always sufficient funding to cover the power produced by the Generators. Sadly, the reality we have experienced is that the receivable accounts position of the Independent Power Producers has deteriorated since the PDS arrangement came into effect!
When, on the 8th of July 2019, the CIPDiB issued a statement about having gone for four months without any payment, PDS came out in rebuttal claiming they had honoured their obligations to ECG. This was later found out to be untrue!
The cumulative outstanding debt position of the GoG/ECG to IPPs alone has escalated to about USD$1.5 Billion! The CIPDiB is once again compelled to ask that payment of the obligations of GoG/ECG be made as a matter of urgency. Immediate disbursement from funds that have been built up in PDS accounts is essential to enable us to continue to produce.
The energy sector is clearly under serious threat and we would urge the Government of Ghana and its agencies, including ECG and MiDA, as well as the MCC to co-operate to ensure that decisions are taken that enable Ghanaians to have access, affordably, to reliable energy supply.
The CIPDiB, as a key stakeholder in the sector, is willing to engage in consultations about the process of securing private investment in the electricity distribution sub-sector in Ghana, and the interface with the generation sub-sector.
Our experience in bringing in billions of dollars of private sector investment into power generation in Ghana makes us confident that this can also be done in the distribution subsector.
With credible, transparent and fair processes, the right calibre of investors can be attracted.
We remain committed to helping Ghana strengthen its power sector so as to serve the needs of Ghanaians.
Elikplim Kwabla Apetorgbor
Chief Executive Officer.
Source: Class FM