By
Grace Princess Tarwo, GNA
Accra, Nov. 13, GNA
– Mr Ken Ofori-Atta, the Minister of Finance, on Wednesday announced
government’s intention to rationalise commercial agreements in the Energy
Sector as well as reassess all take-or-pay contracts.
He said government
would also impose a moratorium on the signing of new agreements in the sector
with a view to establishing a managed transition to overcome the unsustainable
excess supply situation that continued to pose a grave risk to the country’s
economic progress.
Presenting the 2020
Budget and Economic Policy to Parliament, Mr Ofori-Atta said the ministries of
Finance and Energy, on August 26, 2019, hosted Ghana’s Independent Power
Producers (IPPs) and Gas Suppliers (GSs) at a stakeholder forum, during which
government reiterated the need for those interventions and outlined the
approach to implementing them.
Mr Ofori-Atta said
government invited the IPPs and GSs to partner, collaborate and managed
transition from the onerous Take-or-Pay paradigm towards a balanced contractual
relationship capable of delivering fair, enduring energy solutions that
reflected reality and offered long-term sustainability for Power Purchase
Agreements (PPAs) and Gas Supply Agreements (GSAs) in the country.
He said on October
28, this year, government inaugurated a Steering Committee under the Energy
Sector Recovery Task Force, to take responsibility for the collaborative,
bilateral consultation process between government and each IPP and GS to manage
transition towards a more balanced, long-term relationships and sustainable
energy partnerships.
He said the
collaboration had been welcomed by the investor community and would provide a
forum for stakeholders to contribute to Ghana’s energy strategy, which was
fundamental to the country’s industrialisation and sustainable growth.
Mr Ofori-Atta
disclosed that government’s negotiating teams had also been constituted and
were close to completing the first round of bilateral consultation meetings
with several IPPs, as well as project sponsors.
“Significantly,
government views these collaborative bilateral consultations as an essential
exercise, which not only limits downside risks to investors over the medium to
long term, but also demonstrates government’s full commitment to progressively
restoring confidence in the energy sector as well as across other key sectors
in the rapidly growing economy”.
He said to ensure
the success of the bilateral consultation process, government, in line with the
decision taken in the Mid-Year Review, had instructed sector Ministries,
Departments and Agencies (MDAs) to suspend all ongoing negotiations on PPAs and
GSAs, Liquefied Natural Gas Sale and Purchase Agreements, or any other long
term Take–or-Pay contracts for power or gas until further notice.
To this end,
government had placed a complete moratorium on the signing of new PPAs, GSAs,
and Put-Call Option Agreements.
It has also
instructed Electrical Company of Ghana, Ghana National Petroleum Commission,
Ghana National Gas Company, and Volta River Authority to abstain from entering
into any new contracts.
GNA
