Answering questions on the floor of Parliament on Friday, Mr. Agyarko said following recent reviews, these terminations will come at a cost of $402.39.
Government of Ghana early this year said it was reviewing PPAs which was initiated by the Electricity Company of Ghana, specifically under former President Mahama’s administration.
Out of 30 power purchase agreements, the committee reviewing has assessed 26 agreements initiated by ECG, but the remaining were not touched because they were already in operational.
The general capacity of these 26 power purchase reviews amounted to 7298 MW of power.
“Ghana stands to make significant savings” from the deferment and termination of the agreements”, Mr. Agyarko said.
“The estimated cost for termination is $402.39 million compared to the average annual capacity cost of $586 million each year; a cumulative of $7.6 billion from 2018 to 2013. This yields an estimated savings of $7.217 billion over a 13 year period,” he added.
He said the review of the agreements revealed that, “the projected capacity additions from the PPAs were far in excess of the required additions inclusive of the 20 percent system reserve margin from 2018 to 2030, and would result in the payment of capacity charges for undispatched plants.”
The review recommended that; four PPAs with the combined capacity of 1810 MW be deferred from 2018 to 2025.
Three PPAs with the combined capacity of 1150 MW, are to be deferred beyond 2025 along with the 11 PPAs, with the combined capacity of 2808 megawatts set to be terminated.
President Nana Akufo-Addo, during his 2017 State of the Nation address, said the Mahama government had signed 43 PPAs.
The government has indicated that, it may be unable to cancel at least eight PPAs deemed excess capacity because the financial implications range between $400 million and $500 million.
With all the power projects signed by Ghana, the total capacity is estimated to be 10,800 megawatts, even though the country needs 5,000 megawatts.
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By: Sammy Agyei//Frontpageghana.com
