For wasted electricity, Mahama’s Energy Agreements cost more over $320 million – Atta-Akyea

The former John Mahama-led government’s power purchase agreements have come under harsh criticism from the Parliament’s Mines and Energy Committee, which called them extremely unfavourable and harmful.

The present government is required to pay over 320 million dollars in 2018 for unused power costs as a result of 43 take-or-pay power purchase agreements that the previous administration allegedly engaged into.

The chairman of the Mines and Energy Committee, Samuel Atta-Akyea, raised worry about these agreements’ effects on the energy industry at a briefing for the media.

Although 11 of the contracts have already been cancelled by the present administration, Mr. Atta-Akyea said that the hurry with which the former administration took these choices had a negative effect on the energy sector.

“Capacity charges for surplus generating capabilities contracted under the take or pay policy cost 320 million in 2018, and it is anticipated that these costs would rise to 620 million yearly when new plants are added in 2019.

“These wasted supply costs are one of the major causes of the industry’s financial distress. The cumulative net sector debt in 2018 was 2.7 billion, of which 30% was owed to the private sector; this amount is equal to 33% of the government’s tax receipts in 2018, underscoring the magnitude of the financial burden.

Atta-Akyea’s comments reaffirm the issues stated by Pierre Frank Laporte, the Ghana Country Director for the World Bank.

In particular, the unfavourable power purchase deals made during the Mahama government, Laporte blamed the energy sector’s shortcomings for Ghana’s increasing debt.