Review of Power Purchasing Agreements Saves Ghana $700 Million Annually

The Ministry of Energy and Petroleum has reviewed about 30 power purchasing agreements to save the state $700 million annually.

Similar purchasing agreements, signed by the previous National Democratic Congress (NDC) government, would be prioritised for staggered development, while placing moratorium on others.

According to Mr Boakye Agyarko, Minister for Energy, "If the power purchasing agreements currently in place are implemented, the nation will incur annual extra capacity charges of power of about $700 million."

Speaking at the opening of the maiden Ghana Energy Summit organized by the Ministry of Energy and Petroleum under the theme: 'Future of Energy in Ghana', in Accra yesterday, Mr Boakye Agyarko explained that the 'deal driven' generation capacity procurement embarked upon by the previous government had resulted in a very high average power, thereby making our power most expensive in the sub-region.

He said the Ministry has now gotten a better understanding of its current indebtedness to the tune of $2.4 billion, after reviewing the various power purchasing agreements.

In the face of the huge indebtedness, the sector Minister outlined a number of measures the government has introduced to address the challenges facing the energy sector.

One of such measures is the development of a cash waterfall for the transparent collection and distribution of revenues from power sale. This, he said, would rope in more participants in the electricity value chain and fuel supplies.

In addition, government has prioritised mini-electricity grids and stand-alone solar systems for remote communities to access electricity.

Besides, rooftop solar systems will be promoted in all government buildings to reduce the electricity bills, adding that energy efficient measures such as deployment of LED and solar in public lightening would soon be completed in all government buildings to reduce electricity bills.

On the Petroleum sub-sector, Mr. Agyarko said the Ministry was intensifying effort to accelerate Oil and Gas exploration and development.

He explained that the outfit would whip up investor interest in the less explored hydrocarbons basin such as the inland Voltaic and Offshore Central and Eastern basins.

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