We’ll cancel some power contracts if necessary – Akufo-Addo

Business News of Wednesday, 22 February 2017

Source: citifmonline.com

2017-02-22

New Prez Akufo AddoPresident Nana Akufo-Addo

Government is set to conduct an audit of all Power Purchase Agreements (PPA) signed between the Electricity Company of Ghana(ECG) and Independent Power Producers(IPPs) under the erstwhile National Democratic Congress (NDC) government, President Nana Akufo-Addo has hinted.

According to him, the erstwhile John Mahama government had signed 43 PPAs, while a further 23 were under discussion.

Delivering his first State of the Nation Address in Parliament on Tuesday, President Akufo-Addo maintained that, a review is necessary to renegotiate or cancel some of the power agreements.

“Government is conducting a review of all the Power Agreements entered into by the previous government in order to prioritize, renegotiate, defer or cancel outright, if necessary, in the national interest,” the President said.

He further assured that, government has commenced moves to develop a national electricity master-plan to avert a power crisis (dumsor).

“Overall, we have begun developing a national electricity master-plan, which will also explore the benefits of listing VRA and GRIDCO on the Stock Exchange,” he stressed.

Outlining measures to enhance transparency in the power sector, President Akufo-Addo stated that, government will embark on a competitive bidding process to select partners.

“My government will enforce the procurement law. We will insist on open and competitive bidding for power capacity procurement. This will not only reduce the cost of power projects and ensure value for money, but will also address the problem of unplanned procurement,” he said.

PPAs that generated controversies

Some of the power purchase agreements that generated controversies were the KarPowership agreement and the AMERI Power deal.

Debt in power sector

Giving out some figures, President Akufo-Addo disclosed that, the NPP government inherited a total net debt reaching 2.4 billion US dollars as at December 2016.

“ I have to point out the alarming fact that 800 million US dollars of this debt is owed to local banks, which threatens their stability and that of the whole financial sector. Indeed, the huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians enjoying reliable and affordable electricity supply,” he said.

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