Business News of Tuesday, 18 April 2017

Source: todaygh.com

Ghana saves $300M following review of power agreements

Vice President  Dr Bawumia Vice President Dr Bawumia

Vice President, Dr. Mahamudu Bawumia, says government’s review of some power purchase agreements entered into by the previous government has bolstered the energy sector.

He disclosed that they have saved the nation some $300 million through the cancellation of about 20 agreements and review of four others.

This, he said, has “helped to reduce government expenditure.”

Speaking at Joy News’ 100 days Town Hall meeting at the new court complex in Accra yesterday, the vice president said government was committed to improving the energy situation in the country.

Since taking over the rein of power on January 7, 2017 the Nana Addo Dankwa Akufo-Addo-led government has not shied away from registering its disappointment with the way the previous administration handled the energy sector.

At his first State of the Nation Address in February, the president said he was handed a heavily-indebted energy sector that owed its private partners a total sum of $2.4 billion as at December 2016.

President Akufo-Addo noted $800 million out of the total was owed to local banks which was threatening their stability and that of the financial sector.

He announced his preparedness to review a total of 43 Power Purchase Agreements (PPA) entered into by the Electricity Company of Ghana (ECG) in 2016.

The agreements were signed to improve the country’s energy situation that deteriorated from 2012 to 2015.

Former President John Dramani Mahama endorsed many of these deals including a $1- billion power deal with Early Power Limited expected to last for about two decades.

There is also the deal with Turkey-based Karpower signed with ECG in June 2014 that will add 450 megawatts of power directly to Ghana’s electricity grid.

A 17-member committee set up to review one of the agreements, AMERI Power Agreement, revealed the deal was overpriced by $150 million, although former government officials have challenged it.

The Philip Addison Committee has suggested to government to have the deal renegotiated to cut down the cost.

But 100 days after taking the sacred oath to protect the constitution and drive prosperity, the vice president said they have recorded more than 103 achievements.

He listed the review of the 20 PPAs, restoration of the teacher and nursing trainees allowances cancelled by the past government, giving clearance for the payment of new National Service Scheme (NSS) allowance from GHC350 to GHC559 and employing 11, 000 nurses who have been home two years after school as some of the government’s achievements.

Dr. Bawumia also said government has upped the country’s foreign reserve from less than $6 billion to $8 billion.

“With this achievement, you have a lot more confidence in the economy and you see stabililty return to the currency [cedi].”

“When we came in, the cedi was running but essentially we have arrested it and the Inspector General of Police (IGP), David Asante-Apeatu, has the keys. He has locked it up.”