The Africa Centre for Energy Policy (ACEP) has commended President Akufo-Addo for withdrawing the AMERI Novation and Amendment Agreement that was laid before Parliament.
According to ACEP, the decision was a significant contribution to the democratic practice of the country and an assurance that governance could be a shared responsibility between leaders and the led.
“For us at the Centre, we work without negative energies targeted at individuals and political parties; rather we work in defence of the common interest of the larger society.
“The problems of the power sector today could have been averted if Ghana government had been this proactive and sober to reject its own decisions when the evidence in the public space showed that value for money in the power sector was not a priority during the power crisis, particularly between 2014 and 2015 when many of the generation plants were procured,” a statement signed by Benjamin Boakye, Executive Director of ACEP noted.
It revealed that the cost of excess capacity of the power sector to the country currently was more than $200 million a year, adding that that would grow in excess of $600 million by 2020 if drastic measures were not taken to cancel, renegotiate or defer some of the projects that were pending.
“In light of this reality, we monitor how the renegotiations are done to ensure that they rather lessen the economic burden on Ghanaians. We acknowledge that government, through the Ministry of Energy, has already cancelled some of the Power Purchase Agreements (PPA) which would have deepened the woes of the country through unwarranted payments.
“Nonetheless, the power sector still remains a major risk to Ghana’s economic progress because of excess capacity which incidentally are also too expensive to encourage local demand growth or for export.”
ACEP said per government’s decision to withdraw the agreement, it was encouraged to continue to support the governance process to ensure that the power sector does not derail Ghana’s economic prospects.
It further assured that it would submit a full picture of the threats in the sector to the president in the coming days with proposed solutions.
The president was said to have been misled into endorsing the second compact of the AMERI deal, which was not far from receiving parliamentary approval. What was even more disturbing was that the deal, which was about two and a half years away from being completed, was replaced by a 15-year contract to be taken over by a new company, Mytilineos.
The Energy Ministry claimed the renegotiated deal would save the taxpayer $405 million, which ACEP described as misleading.
But ACEP said the new deal would cost the taxpayer $937.5 million.