Business News of Friday, 6 February 2015
Government must cough up a whopping US$100million and put it in an escrow account before Karpower International of Turkey agrees to bring in the two power barges that are expected to ease the power crisis.
The escrow account would hold US$50million each for the two power barges (225 megawatts each) as guarantee against failure by the ECG to pay for the power.
The investors, the B&FT understands, are wary of the financial paralysis of the power off-taker and so are unsure they will be paid expeditiously.
As an Independent Power Producer, Karpower is supposed to shoulder all investments toward the delivery of power while the ECG will pay for power delivered as per the agreed tariff.
It is however not yet clear how government expects to come up with the money, as Director for Generation and Transmission at the Power Ministry, Steve Doku, told a PURC-organised conference that “the money is now the problem”.
Asked when the powership will be in, Mr. Doku said: “Right now what we are looking for is the money. If we put up the bond now, it will be in April”.
The revelation left some attendees of the conference bemused, as they wondered whether the power barges will be in as soon as expected.
The power-barges are part of what the ministry says are “emergency power arrangements” it is embarking on in a bid to shore-up the severe power deficit.
Commenting on the situation, Dr Charles Wereko Brobbey, Former CEO of the Volta River Authority, said there has been a “huge gap” in the transaction time of the power sector, which needs to be filled.
“Our lead times are far too long. We have no history of delivering and delivering on time,” he said.
Aside from the power barges, other projects under the emergency arrangement are a 250megawatt thermal plant to be built at Aboadze and another 250megwatt fast-tracked plant from General Electric.
“These arrangements will eventually increase our generation capacity by about 1,000 megawatts in the short-term and ultimately provide us the platform to pursue the medium to long-term solutions. We are hopeful that these measures will stabilise the situation,” Power Minister Dr. Kwabena Donkor told the press on Monday.