John Peter Amewu, the Energy Minister, on Tuesday said government would save the nation 680 million dollars annually for 13 years in excess capacity charges after reviewing several Power Purchase Agreements contracted by the previous government.
He said upon assumption of office in 2017, the Nana Akufo-Addo-led government realised that the country’s energy sector was in far worse condition than imagined, therefore it conducted an assessment of the sector to find a workable solution to it.
He said the review was conducted based on the poor management of the energy sector by the previous administration, which was characterised by numerous Power Purchase Agreements.
These agreements created potential over-capacity payments, lack of fuel security for power generation, corrupt and opaque procurement of new power plants, inefficiencies and unsustainable inter-utility debts that threatened the satisfactory long-term operation of the power sector.
Mr Amewu, at the Meet-the-Press series in Accra on Tuesday, said the Government, therefore, worked unremittingly with key stakeholders to quickly address the declining state of the energy sector and bring hope to power consumers.
To deal with the financial health of the energy sector, he said government received an impetus through the issuance of the Energy Sector Bond in November 2017, which realised 80 per cent (4.78 billion) of the targeted amount of six billion Ghana cedis for the first tranche to support energy sector agencies to improve operational efficiency and pay off their debts.
In view of that move, he said, government had reduced the Energy Sector Legacy Debt by over 80 per cent and instituted a mechanism to address the debt in its entirety, in order to ensure liquidity within the energy sector and enable the sector players to have a strong balance sheet.
“We have worked with stakeholders to drastically reduce electricity tariffs, modified the Private Sector Participation (PSP) agreement to ensure 51 per cent equity participation for Ghanaians and put measures in place to ensure Ghana reaches its goal of Universal Access to Electricity by 2020,” the Minister said.
Mr Amewu noted that government had put measures in place to ramp up the operations of the Volta Aluminium Company (VALCO) operations to 40 per cent of its capacity at an all-inclusive and globally competitive tariff of 3.5 cents per kilowatt hour (KWh).
Consequently, it had drafted a new National Energy Policy to provide the framework to guide operations within Ghana’s energy sector and ensure a fair balance between the aspirations of government and the interests of industry players, academia, local communities, civil society and other key stakeholders.