Business News of Saturday, 7 October 2017
Parliament has given legal backing to a tax exemption package of 90 million dollars to construct the Early Power project.
The project which is worth 647 million dollars is expected to produce a 400 megawatts power plant.
The Early Power deal was originally signed in parliament in August 2016 after the country went through three years of power crisis.
Deputy Finance Minister, Kweku Kwarteng told Parliament that government is undertaking a review of the exemption policy to enable value for money in future contracts.
“Please take note; we were compelled to do this because we met an agreement that has already committed government to do this. We also note concerns raised about the cost benefit of this exemption,” he said.
He disclosed that government has therefore partnered with some international partners to review the impact of exemptions in the economy
“It is correct that many of us in the past have had reservations about some the exemptions in the economy and it is the reason , we, with the support from DFID are taking steps to do a comprehensive study of the impact of exemptions in the economy”.
Mr. Kwarteng was optimistic such a study gives government ample evidence on the long term effect of exemptions to multinational companies in the country.
The agreement for the 400MW combined cycle gas turbine power plant to be situated in Tema, will be executed by Early Power Limited, a company incorporated in Ghana only in October 27, 2014.
Early Power Limited entered into the agreement with the Government of Ghana, together with the Electricity Company of Ghana (ECG), Sage Petroleum Limited, Endeavor and EPL Holdings Cooperate, UA, General Energy Investments (GE) IBV, and Quantum Gas Terminals.
The project will involved the development, ownership, operation and management of the 400 MW Combined Cycle Plant to be fueled by either Liquefied Petroleum Gas (LPG) or Natural Gas (NG) for a 20-year period by Early Power Limited in Tema, strategically close to the Tema Oil Refinery (TOR).
Beyond the 20-year period, the power plant will transfer to a nominated entity by the Government of Ghana at a purchase price of US$1.00.