Government will from August 1, 2019, only pay Independent Power Producers for power the country consumes.
Currently, Ghana pays the IPPs for power they generate for the country including those not consumed under a “Take or pay” agreement.
According to the Minister of Finance, Ken Ofori-Atta, government will renegotiate such agreements and will seek parliamentary ratification.
“All take-or-pay contracts will be renegotiated to convert to Take-and-pay for both PPAs and Gas Supply Agreements (GSAs). Government has resolved as follows: to convert all Take-or-pay contracts to Take-and-pay contracts.”
The Akufo-Addo government had accused the Mahama administration of signing some controversial power agreements which seems to be shortchanging the country.
The NPP government claimed that, per the agreement, the country is compelled to pay power producers for power they generate but are not consumed by the country.
According to Ofori-Atta “starting August 1st 2019, Government is to pay for energy and gas that we actually consume. All take-or-pay contracts will be renegotiated to convert to Take-and-pay for both PPAs and Gas Supply Agreements (GSAs).”
“Government will seek Parliamentary ratification,” the Finance Minister added.
Ken Ofori Atta also said government has successfully resolved the inconsistent power supply problem in the country.
He, however, noted that there are some challenges in the energy sector that pose financial risks to the economy as a whole, adding that these challenges should be addressed.
“Mr. Speaker, I am happy to reaffirm that ‘dumsor’ is history, and we are determined to ensure that it remains that way. However, we are facing serious challenges in the energy sector that pose grave financial risks to the whole economy. At the heart of these challenges are the obnoxious take-or-pay contracts signed by the NDC, which obligate us to pay for capacity we do not need.”
“We must urgently address these challenges to protect the hard-earned economic gains we have made in the past two-and-a-half years and continue with our economic growth and jobs agenda to improve the lives of Ghanaians. This Supplementary Budget therefore proposes a number of bold measures to confront the issues to ensure that the energy sector delivers the services required by Ghanaians, while maintaining financial viability,” he added,.
