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Energy Minister saves Ghana $700million through review of PPAs

kencitymediagh
Jun 14, 2017
2 min read

Mr. Boakye Agyarko, Energy and Petroleum Minister

The Ministry of Energy and Petroleum has saved the nation some $700m annually following its decision to review about 30 Power Purchasing Agreements (PPA) signed by the previous National Democratic Congress government.

"We have reviewed over 30 power purchasing agreements, prioritizing them for staggered development while placing moratorium on others.

"If the power purchasing agreements currently in place are implemented the nation will incur annual extra capacity charges of power nearly $700m, Energy Minister Boakye Agyarko has said.

Mr Agyarko who accused previous administration of superintending over "deal driven" energy sector said "deal driven generation capacity procurement has resulted in a very high average power making our power most expensive in the sub region."

According to him, the Ministry has now gotten a better understanding of its current indebtedness to the tune of $2.4billion, and has structured a refinancing package that will dislodge these debts from the books of the sector entities into an energy sector bond.

Speaking at the opening of the Ghana Energy Summit organized by the Ministry of Energy and Petroleum under the theme, "Future of Energy in Ghana" Mr Boakye Agyarko outlined a number of measures introduced by the government to address the challenges facing the energy sector.

"We have developed a cash waterfall for the transparent collection and distribution of revenues from power sale, more participants in the electricity value chain, including fuel supplies."

"We have prioritized mini electricity grids and stand alone solar systems for remote communities to access electricity. Rooftop solar systems will be promoted in all government buildings to reduce the electricity bills completed with energy efficient measures such as deploying of LED and solar in public lightening," he added

On the Petroleum sub sector, Mr Agyarko said "the ministry is intensifying efforts to accelerate Oil and Gas exploration and development.

He added that "we will whip up investor interest in the less explored hydrocarbons basin such as the inland Voltarian and Offshore Central and Eastern basins, adding "we are equally accelerating the concurrent development of regulations to ensure seeming less implementation of the Petroleum Act in a transplant manner.”

He expressed the commitment of the Ministry to addressing policy weaknesses in the sector in order to create an energy sector with a healthy balance sheet that makes it possible to keep the light on and keep transportation sector running.

Mr Agyarko urged participants at the summit to share ideas and develop a clear cut medium term policy strategy aimed to proffer solutions to addressing the challenges in the energy sector.

Discussions will focus on three thematic areas namely Energy Sector Governance: Getting it right or wrong? Energy for Economic Growth and Poverty Reduction and Natural Gas: A catalyst for Energy Sector Development.