Business News of Sunday, 16 December 2018
Dubai-based investment firm, AMERI Energy LLC, has finally agreed to lose a total of US$51.34 million in revenue to enable the controversial 250 megawatt deal with the country to be implemented without any further hitches.
It followed a consensus between the government and the company for the latter to waive some variable costs amounting to US$41.5 million, grant an unconditional discount of US$7 million and further forfeit some US$2.5 million if payment of a deferred sum is prompt.
This brings to an end, two years of gruelling negotiations between AMERI and the government, which begun in February 2017 with the Philip Addison-led 17-member committee, and later led to the sacking of Mr Boakye Agyarko as Energy Minister in August this year before the current truce.
In a Joint Parliamentary Memorandum submitted to Parliament by the Minister of Energy, Mr John Peter Amewu, and the Minister of Finance, Mr Ken Ofori-Atta, the Africa & Middle East Resources Investment Group also agreed that payment of US$63.75 million as revenue be deferred and made a year after the contract had ended.
The transaction is a five-year build, own, operate and transfer (BOOT) contract for AMERI to deploy 10 units of gas turbines with a unit capacity of 230MW. It will run between 2015 and 2020
As a result of AMERI’s concessions – technically called haircut – the emergency power deal, which was initially billed to cost the country some US$386.5 million between 2018 and 2020, will now cost US$335.16, according to the joint memorandum, which Parliament is expected to ratify before it rises for the Yuletide.
The tariffs, however, remain the same.
In exchange though, the government is expected to pay the accumulated debt of US$90 million to the Africa & Middle East Resources Investment Group within a seven-month period, starting with a US$10 million payment on November 1, 2018.
The current consensus was approved by Cabinet on November 30 and subsequently submitted to Parliament this month. In the Joint Memorandum, which is available to the GRAPHIC BUSINESS, the government said the deferral in the payment of the US$63.75 million to 2021 “provides liquidity space.”
“These achievements, therefore, meet the overall objective of government for renegotiating the BOOT agreement,” the document said and further urged parliamentarians to support the move by approving the enhanced agreement.
The document said the review was aimed at reducing the overall cost of the plant and its operations as well as improving the payment terms of the state under the contract.