Painstaking investigations by The Finder, supported by some energy experts, have discovered that the Variable Charge in the Africa and Middle East Resources Investment Group’s (AMERI Energy) contract with Ghana appears to be inflated by as much as $37,667,000 ($37.6m).

Even though the Terms of Agreement in the contract quotes the Variable Charge as $83m for the five years, the actual Variable Charge, according to our calculation for the five years, is $45,333,000, ($45.3m), a difference of $37,667,000 ($37.6m).

Per the contract, Variable Charge is $0.005 per Kilowatt Hours (kWh) or unit, which has been calculated to amount to $16.6 million per annum.

The $16.6 million per annum will translate into $83m in the five years that the contract will last before it is transferred to the Government of Ghana.

However, The Finder has discovered that the Variable Charge is $9,066,600 (approximately $9.1 million) per annum instead of the $16.6 million stated in the contract.

The guaranteed output of the 250MW-capacity plant is 230MW per day with guaranteed availability of 90%.

The 230MW is the same as 230,000-kilowatt hours or units per day, and the plant is expected to work for 8,760 hours in a year.

A simple multiplication of 230,000-kilowatt hours or units per day by the 8,760 hours that the machine is expected to work in a year will generate 1,813,320,000 (1.8 billion) units a year.

When the 1,813,320,000 (1.8 billion) units a year is multiplied by 0.9, representing the 90% guaranteed availability, and the answer is multiplied by the Variable Charge of $0.005 per Kilowatt hours, it will be equal to $9,066,600 (approximately $9.1m) per annum.

The Finder’s investigations have been confirmed by some energy experts who do not want to be named.

By The Finder’s calculation, if the AMERI plant operates at the 90% guaranteed availability contained in the contract for 8,760 hours in a year, it will generate revenue of $264,959,027.76 ($264.9m) per annum.

Out of the amount, $154,132,200 ($154.1m) will be the cost of fuel for a year while the remaining $110,826,827.76 ($110.8m) will be used to pay for Variable Cost and the cost of the machines.

Consequently, for five years, the AMERI plant will generate revenue of $1,324,795,138.8 ($1.3 billion).

Out of this amount, $554,134,138.8 ($554.1m) will be paid to AMERI for the five years.

METKA deal is $350m

The entire cost of the fast-track engineering, procurement and construction services, as well as operations and maintenance support for a 250MW AMERI Energy power plant in Ghana is $350m, according to METKA, a company contracted by AMERI to supply the plant.

This is far lower than the $510m that Ghanaians are being told is the actual cost of the AMERI power plant for the five-year contract.

According to METKA, the project has an overall duration of five years and a budget of $350m, consisting of fast-track Engineering, Procurement and Construction (EPC) works of six months at a cost of $250m.

According to the company executing the contract, the project has a four-and-half-year Operation and Maintenance Cost (O&M) contract worth $100m.

14.59 cents for every kilowatt hour tariffs

Ghanaians will pay 14.59 cents for every kilowatt-hour (1unit) of electricity to be generated by the Africa and Middle East Resources Investment Group’s (AMERI Energy) power plant because of the unreasonable and questionable $510 million cost of the project.

This will translate into 55 pesewas for every kilowatt hour (1unit) of electricity AMERI generates.

This is way above the amount Ghanaians pay for every kilowatt hour (1unit) of electricity.

The amount paid for every kilowatt hour (1unit) depends on the cost incurred in constructing the power plant.

Government’s responsibilities

The Government of Ghana is to provide free utilities, free housing, site for storage, prepare site for the installation of the plant, as well as interconnect facilities to connect the plant to the national grid.

Under the contract, the Volta River Authority (VRA) is to divert gas from the Atuabo Gas Project to meet fuel requirement of AMERI.

Terms of the Agreement

Equipment Payment –– US$850,000 per month per unit

Number of Units –– 10

Output of each unit (site) –– 23MW

Total Capacity –– 250MW (ISO)

Guaranteed Output –– 230MW

Guaranteed availability –– 90%

Payment per year –– US$102 million

Variable charge per year –– US$0.005/kWh (US$16.6 million per annum)

Applicable Tariff (Year 1 to 5) –– US Cent 14.5918/kWh

Applicable Tariff (Year 6 to 20)–– US Cent 10.4149/ kWh