Future power deals will be strategized – Boakye Agyarko
The Minister of Energy, Boakye Agyarko has described past agreements in the energy sector as “deal-driven” and not “strategy-driven”.
He argues that most of the agreements with Independent Power Producers failed to fully address the energy needs of the country and has pledged to employ some strategic policies to guarantee the efficient generation and efficient distribution of power across the country.
“Often times I have maintained and this is a personal view that the Energy Sector has been deal-driven instead of strategy-driven and therefore we do not approach the sector with a comprehensiveness that is required,” the Minister said at the National Policy Summit in Accra today [Tuesday].
He indicated that the concentration of power generation in the East; Tema enclave to the neglect of other parts of the country has created what he calls a “load imbalance”.
“Let me give you an example. All the major loads in the country in terms of power generation is concentrated in the East; Tema enclave. There is very little in the Aboadze and there is absolutely nothing in the middle of the country; that in itself creates a load imbalance for GRIDCo...Because we were driven by the deals we could get, there was no plan to distribute the load around the country. That is my personal view as I have observed it. Even now people prefer to build power plants around the overcrowded enclave of Tema.”
Proffering suggestions to these challenges, the Minister emphasized the need to make power sector a strategy driven place where business men find their deals so power will be “competitively procured.”
“We will also use standardized procedures and documentation so that all the liquidity and security documentation that comes with power procurement will be standardized. Investor A faces the same standard document as investor B,” the Minister added.
Government had earlier argued that some of the power agreements including Ameri and Karpower, that the Mahama government entered into were bloated.
Government in a bid to ensure value for money set up a 17 member committee under the Energy Ministry to review the Ameri power deal which was believed to have been bloated by $150 million.
The 17-member committee was also constituted on grounds of other financial, technical and legal issues, and insisted that AMERI must be made to re-negotiate the deal or be rejected by Government on grounds of fraud.
The committee maintained that AMERI in its agreement with government dated February 10th, 2015, charged Ghana significantly higher than what it was charged by the Turkish registered company, PPR, which financed and executed the project.
The Turkish firm pegged the total cost of the project which is to span over a 5 year period at a maximum of 360 million dollars. However, the Build Operate Own Transfer (BOOT) agreement signed between government and AMERI was pegged at a minimum of 510 million dollars.