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Business News of Thursday, 24 June 2021


Ghana must brace up for more judgement debts - Energy Associates predicts

Energy associates predict, there are many PPAs threatening to file suits against the government Energy associates predict, there are many PPAs threatening to file suits against the government

Think tank The Energy & Associates Ghana says there are several cancelled power purchasing agreements (PPAs) threatening to file suits against the government.

Aside from those PPAs, firms like GCNET and Beijing Everyway Traffic and Lighting Technology Company Limited have already sued the country over the termination of their contracts.

This, the think tank said, is as a result of wrongful judgement on the part of government in rushing to terminate contracts signed in the previous government.

It comes in the wake of a judgement debt of $170 million awarded against Ghana for the termination of the PPA of Ghana Power Generation Company (GPGC) by the London-based United Nations Commission on International Trade Law tribunal.

In a statement issued on Thursday, June 24, The Energy & Associates Ghana said the then Minister of Energy, Boakye Agyarko, failed to appreciate the circumstances under which the contract was signed in 2015.

“We failed as a country to reconcile the energy crisis era against when we gained stability in the sector,” it said.

“If you treat contracts signed during the crisis-era as though we had excess generation at the time, we would obviously make these conclusions.

“It is quite baffling that the Minister at the time Mr Agyarko went against the Ahenkorah Committee’s recommendations to terminate the contract, what motivated this move must be made known.”

No excess generation

It further stated that the country must not delude itself into thinking there is excess generation capacity.

“If you look carefully at the Electricity Supply Plan 2021 by the Energy Commission, there is projected demand of 5262MW in 2026, however total committed generation is 450MW.

“If you add this committed generation of 450MW to our existing generation of 4420MW, it is clear we will have a deficit of generation of some 400MW in coming years if we do not make investments in generation.

“So, we are not out of the woods yet to be calling every agreement wasteful and needless.”