The Economist Intelligence Unit (EIU) has described attempts by the Akufo-Addo administration to renegotiate the power purchasing agreements signed under the previous administration as ‘radical’, arguing that the approach could scare aware potential investors.
The business advisory firm in its latest country report said a radical revision of power contracts i.e take or pay agreements, may not happen at all.
“All independent power projects typically include some level of “take or pay” commitment, while unilateral action by the state party risks damaging wider investor confidence in Ghana,” citinewsroom.com quoted EIU’s report saying.
It would be recalled that the Finance Minister of the West African nation, Ken Ofori-Atta in his mid-year budget review remarked that a number of existing power purchasing agreements signed by the NDC administration are severely putting a dent on government finances.
Ken Ofori-Atta said annually, the government has had to pay US$500 million for power in does not consume or sell to consumers.
“Mr. Ofori-Atta referred to the deals as “obnoxious take-or-pay contracts signed by the NDC government, which obligate us to pay for capacity we do not need”.
The finance minister pledged that from August 1st, all “take or pay” contracts would be renegotiated and converted into what he termed “take and pay” deals, presumably indicating a form of contract whereby the government would reimburse suppliers solely for the resource used.
Renegotiated agreements
Before Mr. Ofori-Atta’s announcement, the government had already concluded the renegotiation of the Ameri Energy deal in December.
The new deal saw the reduction of the price of a five-year build-own-operate-transfer contract expiring in 2021 to supply 250 MW of emergency power from US$510m to US$459m.
Also, in March 2018 the contract for the Karpower plant was extended from 10 to 20 years, and the tariff reduced.
But the EIU in its country report stated that the new Ameri and Karpower deals imply that government may not achieve much with its plans to renegotiate these deals.
“…However, the legacy of the “take or pay” contracts is expected to remain a burden on state finances throughout the 2019-23 forecast period,” the report added.
Its like you read my mind! You seem to know a lot about this,
like you wrote the book in it or something. I think that you can do with
some pics to drive the message home a little bit, but instead of that, this is excellent blog.
A fantastic read. I’ll certainly be back.
Wonderful site you have here but I was wanting to know if you knew of any community forums that cover the same
topics discussed here? I’d really like to be a part of online community where I can get
responses from other experienced individuals that share
the same interest. If you have any recommendations, please let
me know. Bless you!
Quality articles or reviews is the crucial to interest the visitors to pay a quick
visit the web site, that’s what this web site is providing.
Pretty nice post. I just stumbled upon your weblog and wanted to
say that I have truly loved browsing your blog posts. In any case I’ll be subscribing on your rss feed and I am hoping you write
once more soon!
Spot on with this write-up, I honestly think this site needs far more attention. I’ll probably be returning to see more,
thanks for the info!
hello there and thank you for your info – I have definitely picked up anything new from
right here. I did however expertise several technical points using this site, since I experienced to reload the web site lots of times previous to I could get it to load
correctly. I had been wondering if your web host is OK?
Not that I am complaining, but slow loading instances times will sometimes affect your placement in google and can damage
your quality score if ads and marketing with Adwords.
Anyway I’m adding this RSS to my e-mail and could look out for a lot more of your respective intriguing content.
Ensure that you update this again soon.
Useful info. Fortunate me I found your website unintentionally, and I am surprised why this twist of fate didn’t came about in advance!
I bookmarked it.
It’s hard to come by educated people about this subject, however, you sound
like you know what you’re talking about! Thanks
These are in fact impressive ideas in regarding blogging.
You have touched some nice things here. Any way keep up wrinting.
I couldn?t refrain from commenting. Exceptionally well written! https://www.familiservices.fr
This is my first time pay a visit at here and i am truly impressed to read everthing at alone place.
Saved as a favorite, I like your blog! https://cavm-ombc.ca
Thank you for the good writeup. It in fact was a amusement account it. https://www.forestube.com
Constructive criticism can be a valuable tool, and if you use it effectively, you will improve your blog.
Superb, what a webpage it is! This web site gives valuable information to us, keep
it up.
Thanks for your compliment
Wow, this article is pleasant, my sister is analyzing such things, therefore
I am going to convey her.