A former deputy minister of energy and petroleum, John Jinapor, has denied reports that Ghana pays $500 million annually for excess capacity in the electricity sector.

According to Bloomberg, Ghana is considering to buy out the debts of independent power producers as a step toward restructuring contracts and reducing its power bill.

“West Africa’s second-biggest economy currently pays as much as US$500 million per year for power it doesn’t consume and is in talks to end the practice,” the report said.

However, responding to the news, Mr. Jinapor said: “If Ghana really has 2,000MW excess capacity for which we pay US$500 million, how come Ghanaians are being made to endure load shedding (dumsor) for the 3 weeks despite having excess capacity?”

Below is his full statement:

“My attention has been drawn to an online publication from Bloomberg which makes the false claim that Ghana pays US$500 million per annum for Excess Capacity in the electricity sector. It’s further claimed that this payment arises from take-or-pay contracts signed under the NDC administration.

This assertion is false and misleading. And the facts do not support the spurious claim.

A cursory look at the 2019 report from the Electricity Company of Ghana (ECG) which is the sole off-taker to the Independent Power Producers (IPPs) in Ghana reveals without doubt that about eleven thousand and five hundred gigawatt-hours (11,529.97GWH) of electricity was procured out of a total projected dependable capacity of Three Thousand, Four Hundred and Twenty Four Megawatts (3,424MW).

It is instructive to note that by accounting for the 25% required reserve margin which serves as insurance for the Nation, the claim of Excess Capacity becomes flawed.

Therefore, once again, the assertion that payment of US$500 Million has been made as a result of a so-called Excess Capacity is not only erroneous but completely false.

If Ghana really has 2,000MW excess capacity for which we pay US$500 million, how come Ghanaians are being made to endure load shedding (dumsor) for the 3 weeks despite having excess capacity?”

By Hon John Abdulai Jinapor