A former deputy Minister of Power, John Jinapor is calling for more details on the cancellation some Power Purchase Agreements (PPA) expected to cost Ghana $402 million in the short term.
The Energy Minister, Boakye Agyarko, stated before Parliament that Ghana will save about $7.217 billion from the termination of the 11 PPAs over a 13-year period despite the cost of $402 million that will be accrued as a result.
Mr. Agyarko, who has described some of the agreements as knee-jerk reactions to the dumsor crisis, said the PPAs would be providing excess power if they came online.
But Mr. Jinapor believes some of the payments may not be warranted.
“Let the minister supply us with that information. We want to peruse the so-called companies. We want to look at why the ministry would want to pay [$402 million] because as I indicated, some of the agreements placed certain obligations on the power producers which they have failed to fulfill,” he stated on Eyewitness News.
According to Mr. Jinapor, some of these companies “were supposed to have come on stream five years ago. Some were supposed to have come on stream four years ago and so you don’t go paying compensations from those ones.”
“For all you know, we don’t even need to pay anything close to [$402 million] because we have done the figures, we have done the permutations and we are sure the some could be cancelled at no cost… we need further particulars. we need further information.”
Review started in 2015
Giving some background on the PPA agreements, Mr. Jinapor recalled that in June 2015, then Finance Minister Seth Terkper set up a team, which included the World Bank, to review all PPAs and make projections for the next 10 years. In November 2016, the World Bank and the Energy Sector Group came out with a report that recommended the review of some PPAs which date as far back as the Kufuor era.
“Pursuant to that, we took a memorandum to Cabinet and Cabinet adopted same and directed that we review them [the PPAs] but then we should get the Attorney General’s advice… in our handing over notes, this was well captured,” he said.
Mr. Jinapor made this point to underscore the fact that reviews of the PPAs began before the New Patriotic Party (NPP) took power.
The former minister noted that on the floor of Parliament, Boakye Agyarko “only said government commissioned a team. He didn’t give a date, he didn’t tell us which team it was.”
“I want to believe they are following through on what we started because clearly, it would appear that if we were to allow all those PPAs to come to fruition, we wold have excess capacity.”
Credit: Citi FM