John Jinapor, a former Deputy Minister of Power, has refuted reports that the previous Mahama administration entered into power purchase deals that cost the nation more than $320 million.
Samuel Atta Kyea, the chairman of the Parliament’s Mines and Energy Committee, accused the NDC of signing 43 take-or-pay power purchase agreements, which forced the current administration to fork over $320 million in 2018 for unused electricity costs.
John Jinapor denied these assertions, claiming that the NPP contributed to some of the losses experienced in the energy sector.
“ECG losses alone have increased from 23 percent to 31 percent so when the Minister of Finance pays for those losses, it is not excess capacity. It is power delivered. There is a power reserve margin of 20 percent and it is statutory and this government came and decided that it shouldn’t be part of the tariff structure and it is a political decision.”
John Jinapor
The Yapei-Kusawgu legislator attributed other causes for the soaring energy debt as against Mr. Atta Kyea’s claims, such as significant leakages, forex losses, exchange differentials, and other causes.
“The problem is a result of forex losses, exchange rate differentials, and the unnecessary political interference which is leading to this payment and it cannot be attributed to former president Mahama. Immediately these PPAs expire, they quickly renew them and not from the five years that we did but for fifteen years. We will not allow these double standards to go because the facts speak for themselves.”
John Jinapor
Rising Debt In Energy Sector Resulted From Mahama-Administration
The previous John Mahama-led government’s power purchase agreements have come under harsh criticism from the chairman of the Parliament’s Mines and Energy Committee, who called them extremely unfavorable and harmful.
Mr. Atta Akyea raised concern about the effects of these agreements on the energy sector during a media briefing.
Although the present administration has already canceled 11 of the contracts, Mr. Atta Akyea claimed that the previous administration’s hasty choices had a significant negative impact on the energy sector.
“In 2018, excess generation capacities contracted under the take or pay cost 320 million in capacity charges and are estimated to increase to 620 million annually with the addition of new plants in 2019.
“These unused supply charges are one of the significant sources of financial strain on the sector. Cumulative net sector debt was 2.7 billion in 2018 with 30 percent payable to the private sector, this sum is equivalent to 33 percent of the 2018 government’s tax revenue highlighting the scale of the financial burden.”
Atta Akyea
Atta Akyea’s comments support those expressed by Pierre Frank Laporte, the Ghana Country Director for the World Bank.
Laporte blamed the energy sector’s shortcomings, particularly the unfavorable power purchase deals made during the Mahama administration, for Ghana’s mounting debt.
READ ALSO: Traditional Council Petitions Parliament Over Bortianor Killings
