The Member of Parliament for the Dormaa East Constituency, Paul Apraku Twum-Barimah, has commended the World Bank country director, Pierre Frank Laporte, over comment made regarding the previous government’s contract with Independent Power Producers (IPPs) within the energy sector.
According to him, the contract between government and the Independent Power Producers signed under the supervision of John Dramani Mahama has been the bane of Ghana’s current economic woes. He revealed that the said agreements which were signed between 2012 and 2016 pushed Ghana’s economy to the brink of collapse with huge financial loss to the state.
Mr Twum-Barimah stated that over GHC12 billion was paid as capacity charges to the Independent Power Producers (IPPs) between 2017 and 2021. This, he described as an open secret that was revealed by the World Bank Country Director, Pierre Frank Laporte, and thus cannot be political meddling.
“What the World Bank country director said is something that is factual. It is obvious that the PPAs we signed are part of our problem. As we speak, between 2017 and 2020, we have paid over GH¢12 billion and do you know what that amount could have done for us? I think we should commend the World Bank director for saying what he said.”Paul Apraku Twum-Barimah
Contracts signed under Mahama administration expensive
Furthermore, Mr Twum-Barimah iterated that some of the country’s PPAs with IPPs signed under former President Mahama’s administration were too expensive and wrong. Owing to this, he expressed the need for an urgent review of some of the power agreements.
“In the aspect of Ghana, those contracts you signed with the PPA are too expensive. The kind of PPA you signed means, Ghana is paying for electricity not in use through the doubling of capacity. The fact is, in the last few years, Ghana entered into some PPAs that were wrong. These types, in our view, were at the wrong rate and at the wrong prices and today you’re paying duly for it. And today the country is being billed for many of these wrong PPAs.”Paul Apraku Twum-Barimah
Prior to this, the Minority in Parliament lashed out at the World Bank Country Director for his comments on Ghana’s energy sector.
Minority Spokesperson on Mines and Energy, John Jinapor said Mr. Laporte is veering off into local politics and must stay away. He stated that “Ghanaians are sick and tired of these unnecessary and flimsy blame games adopted by government and its high links”.
Moreover, Mr Jinapor advised the World Bank Country Director to continue to work as a “technocrat and not meddle himself in the field of politics”. He iterated that Mr Laporte is not a politician and making such “unsubstantiated comments” has far-reaching ramifications on the country.
Also, Mr Jinapor noted that former President John Mahama’s records in the energy sector are unmatched. He equally explained that prior to Mr Mahama leaving office, he ensured that there was a comprehensive reboot on the generation of power and the financial sector.
It will be recalled that former President John Mahama was mentioned by the World Bank Country Director for Ghana’s current ailing economy due to the bad Power Purchase Agreements (PPAs). During his administration, he signed Take-or-Pay contracts that compelled Ghana to pay GHC12 billion for power that was not consumed.
The Finance Minister, Ken Ofori-Atta, sought to be resourceful from 2017 to 2021 to meet Ghana’s financial commitments to IPPs, ensuring continued power supply without power fluctuation experienced during the Mahama’s administration.
Analysts believe the only solution to Ghana’s energy debt problems is for a renegotiation of power contracts signed by the previous administration. The government has meanwhile started talks with IPPs to renegotiate some of these PPAs.
Ghana presently has an installed power capacity of about 5,000 megawatts and dependable capacity of about 4,700MW with the all-time high peak demand of 2,700MW.