John Peter Amewu
THE AKUFO-Addo-led New Patriotic Party (NPP) administration saved the energy sector over five billion dollars by relocating Karpowership Ghana Company Limited and securing agreements with CENIT Power Limited as well as Cenpower Generation Company Limited.
It also paid in excess of a billion dollars to independent power producers (IPPs) in addition to GH¢2.7 billion paid by Electricity Company of Ghana Limited (ECG).
Again, it has continued to progress the Energy Sector Recovery Programme (ESRP) in spite of the many challenges the energy sector was bequeathed from previous administrations.
Consequently, today, Ghana pays over $500 million a year in excess capacity payments, i.e. payment for power that it does not use or need.
Despite such challenges, government prioritized making payments to the IPPs to reduce the debts.
A spokesperson for the Energy Sector Recovery Programme, commenting on this issue, noted that “government has successfully kept the lights on over the past four years and intends to continue doing so for the years to come. The electricity produced by IPPs drives the engine of our economy and contributes to sustainable development. The onerous take-or-pay contracts painfully obligate government to pay over $500 million a year for power we do not use.
“This year alone, government has made payments of a billion dollars to IPPs; all while keeping the power on and prices low.
“Government will continue to manage the situation by negotiating more balanced contracts, reducing the debt, instituting careful forward planning and proper data-driven analysis as well as transparent and competitive energy procurement processes to build a resilient and sustainable energy sector for the good people of Ghana.”
He continued that government committed to building an energy sector based on long-term energy security, sustainable investment and partnerships to bring affordable accessible energy to Ghanaians in line with its vision of a Ghana Beyond Aid.
In collaboration with the World Bank, government established the ESRP, identifying the policies and actions needed for financial recovery in the energy sector over a five-year horizon (2019-2023).
Furthermore, Government’s Negotiating Team, established under the Energy Sector Recovery Task Force (ESRTF), led by Yaw Osafo Maafo, Senior Minister, has worked bilaterally with IPPs and gas suppliers under the ESRP Consultation Process, to secure more favourable and sustainable agreements for both parties.
“As the nation’s energy sector matures, it is standard practice to undergo such reform and restructuring processes,” he added.