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Ex-Energy minister paints World Bank country boss as grossly ignorant on PPAs

Former Minister of Power, Dr Kwabena Donkor, described as unfortunate, comments by the World Bank Country Director, which suggest that the erstwhile Mahama administration wasted money by signing burdensome Power Purchase Agreements (PPAs) signed almost seven years ago.

“This is a politician who needs friends in the neighbourhood for his political edges ambitions,” said Dr. Donkor, who had hit back at Pierre Frank Laporte for claiming the Mahama government equally contributed to Ghana’s economic woes due to the Power Purchase Agreements (PPAs) signed under a take-or-pay agreement committing the country to pay for excess energy it did not need.

“In the case of Ghana, those contracts that have been signed as PPAs are just expensive and the kind of PPAs signed are take or pay. You pay although you do not use it. The fact is that in the past few years, Ghana entered into an agreement at the wrong rate and the wrong price, and it has impacted the debt situation,” Mr Laporte said.

Dr Donkor initially fired a response saying “I signed the AKSA PPA. It’s a 5 Year Emergency Power Agreement. It has expired. If Nana Addo’s Government negotiates a new PPA (and not under Emergency, how do you blame Mahama? AMERI was a BOOT and the plant is fully owned by Ghana. Sunon Asogli Phases 2 & 3 were just extensions of existing Agreements at a lower price. NPP negotiated and extended the KARPOWER agreement from 10 years to regular PPA of 20-25 years. How is Mahama to be blamed?

Mr Laporte, who also spoke said funds his outfit gave out to the government of Ghana for the COVID-19 fight essentially rubbished the content of the reports done by the Audit General, Johnson Akuamoah Asiedu, which identified several infractions in how the Akufo-Addo government spent the fund, saying the bank does not feel that the over US$430 million it gave was misused.

According to him, the fund his outfit gave to Ghana was managed by a project team made up of officials of the bank and the government of Ghana and was not included in the budget of Ghana.

Speaking in a TV3 interview, Laporte added that the team managing the funds ensured they were used for their intended purposes and paid directly to contractors.

“We have given $430 million to Ghana for COVID. Our project funds have not gone to the budget of the Ministry of Finance, and because of this, we’ve mechanisms in place that ensure we know each and every dollar that is spent and accounted for and we’ve done audits.

“Of course, there are always a few things here and, procedure-wise, maybe some documentation that needs to be followed.

“But largely speaking, we are very satisfied that all of our resources were spent in line with the procurement requirements that existed. You know, COVID-19 was implemented under emergency procurement measures by the bank,” he said.

The director said that the money given to the government of Ghana is still being used, adding that the bank was working to make more funds available.

Elsewhere, he was quoted by The Telegraph as saying “we have done our audit, and we concluded that the Government of Ghana largely used the COVID Support tokens properly to the benefit of Ghana. We are very satisfied that our resources were spent in line with the procurement requirement that existed. We don’t feel that our resources have been misused or mismanaged. From our audits, all funds provided to Ghana were expended for their right purposes”.

But Dr Donkor in second response to the Energy sector in particular on the Point of View on Citi TV hosted by Bernard Avle, questioned why the World Bank Country Director would blame the then National Democratic Congress (NDC) government when the New Patriotic Party (NPP) has been in power close to 7 years.

“The current Energy Minister, Dr Mathew Opoku Prempeh, will tell you that on the NDC’s side, a number of us were quietly working together as a team, as a country to find a way out of our energy conundrum. And then this gentleman [Pierre Frank Laporte] comes in, in the cloak of the World Bank but as a partisan to throw a hammer into the works with a blame game.

He added, “NPP has been in power for at least 6 years into the 7th year and to still blame the past administration, blame the PPAs for all the challenges especially relating it to the fact that Ghana has its debt situation because of Independent Power Producers (IPPs) is unfortunate”.

The former Energy Minister accused the World Bank Country Director of seeking political friends in Ghana, hence his accusations.

“This is a politician who needs friends in the neighbourhood for his political ambitions,” he claimed.

He explained that it’s impossible to get the best value for money when things are done under conditions of emergency.

“He [Laporte] said we have contracted very expensive PPAs and I will tell you, and this has been proven by a PWC value for money review that the Ameri Power Plant levelised over the 20 years is still the cheapest thermal plant in Ghana… Anywhere in the world, when you have to do things under conditions of emergency you often do not get the best value for money,” Dr. Kwabena Donkor stated.

He says the deteriorating exchange rate is the major contributing factor to the huge debt crippling the energy sector.

Benjamin Boakye, the Executive Director of the African Centre for Energy Policy (ACEP), who was also on the Point of View on Citi TV, emphasized the need for collaborative action to address the challenges in Ghana’s energy sector, rather than assigning blame.

In response to the World Bank Country Director’s accusations, Boakye called for focus on resolving the issues, rather than singling out the erstwhile NDC government for blame.

According to Boakye, collective efforts are required to tackle the realities of the current situation and hold both the ECG and politicians accountable for their respective roles.

“There’s a current problem that we have to face and there are people in charge of fixing and managing the power system. How does ECG’s 50 percent under recovery happen, it is not in the political ballroom, it is the reality that we have to hold ECG accountable and hold the politicians who interfere, accountable.

“Let’s make sure that when they are given the power to sell, they are able to sell the power and recover their money…We can’t be discussing what the politician should have done, whether it is expensive or not, PURC has priced that to a tariff and therefore when I pay for my bill at the price set by PURC everybody else has to pay. So those who are stealing the power we need to find ways to stop them,” Mr Boakye said on Monday, June 5.

Claims are that in four years, the Akufo-Addo government paid $937.5 million to three independent power producers (IPPs) for excess capacity charge between 2017 and 2020.

AKSA was paid $347 million, Karpower $359 million and Cenpower $251 million.

AKSA was paid $35.7 million in 2017, $59.4 million in 2018, $136.8 million in 2019 and $115.3 million in 2020.

In the case of Karpower, the company received $65.5 million in 2017, $108.9 million in 2018, $138 million in 2019 and $46.8 million in 2020.

With regard to Cenpower, the company received no payment in 2017 and 2018, but was paid $86.5 million in 2019 and $144.8 million in 2020.


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