Image

We’re spending US$500mn on unconsumed power — Ofori-Atta

The Finance Minister Ken Ofori-Atta has said the previous administration signed power deals that cost the government about US$500 million per annum in power that is not consumed.

Speaking at the presentation of the 2019 mid-year budget, Mr. Ofori-Atta said the country’s total installed capacity of 5,083 MW is almost double our peak demand of around 2,700 MW.

“Notably, 2,300 MW of the installed capacity has been contracted on a take-or-pay basis. This means that we are contractually obliged to throw away money for this excess capacity which we do not consume. This has resulted in us paying over half a billion U.S. dollars or over GHS 2.5 billion annually for power generation capacity that we do not need,” he said.

From 2020, if nothing is done, we will be facing annual excess gas capacity charges of between US$550 and US$850 million every year. Thankfully, we have a plan to deal with this.

The Finance Minister argued that government will have to review these agreements.

“We cannot allow this situation to continue. There is no doubt that the situation in the energy sector is shocking the economy. We are in a state of emergency and must, therefore, respond with urgency and boldness. We shall from August 1st 2019, with the support of Parliament, make Take or-pay contracts a beast of the past,” he added.

Comments

Leave a Comment

Recent Posts