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World Bank Country Director's claims are factually inaccurate – Former Energy Minister

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Mon, 5 Jun 2023 Source:

A former Minister of Energy, Dr. Kwabena Donkor, has clapped back at the World Bank Country Director, Pierre Laporte, for his comments regarding Ghana’s unsustainable debt levels could be traced back to the energy sector.

According to him, the assertions that Ghana’s debts have largely been because of expensive power-purchasing agreements, among other energy sector happenings under the John Mahama administration, are factually inaccurate.

“Ladies and gentlemen really want the country director to come again,” he told journalists on June 5, 2023.

Kwabena Donkor further intimated that Ghana exhausted its major hydro potential, leading to a higher thermal power dependency.

He adds that thermal power is expensive, therefore leading to higher tariffs.

“The country director needs to be told that Ghana no longer has the capacity for serious hydro; indeed, the only reason we have not been able to dam the Pras, the Ankobras, is because the cost will be high, and the tariffs will be high. We have exhausted all our major hydro potential. And therefore, we have no option in the short term than thermal plants.

World Bank director says we have crowded the generations with expensive PPAs. I am quite surprised that the World Bank Director will make such assertions without any realities,” he said.

The World Bank (WB) Country Director to Ghana, Pierre Frank Laporte, has stated that Ghana’s energy sector debt is a major contributor to the country’s debt woes.

According to Laporte, the deficiencies in the sector, characterized by the tariff systems and management issues coupled with expensive power purchases by the state, in addition to the transmission losses, were the major problems in the energy sector driving Ghana’s debts.

He said the mismatch between the production cost of the Independent Power Producers (IPPs) vis-à-vis how much consumers paid led to an upsurge of debts since the Government could not make financial commitments to them (IPPs).

Laporte also said the Power Purchasing Agreements (PPAs) the Government had signed were expensive. In addition to the exorbitant power purchases, the country was paying for energy it does not use due to the “take or pay contracts.”

“In the case of Ghana, those contracts that have been signed as PPAs are just expensive, and the kind of PPAs signed are take or pay. You pay, although you do not use it. The fact is that in the past few years, Ghana entered into an agreement at the wrong rate and the wrong price, and it has impacted the debt situation,” he said.

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