Former Energy Minister Boakye Kyeremateng Agyarko has shed light on the circumstances surrounding the termination of the GPGC Power Purchase Agreement (PPA).
He expressed his disappointment in statements made by Hon. Kwabena Donkor, emphasizing that it was not within his or any other minister’s authority to unilaterally cancel such a contract.
He clarified that the decision was part of a broader effort by the newly elected NPP government to manage the cost of power generation and distribution in Ghana.
The termination of the GPGC PPA, which had a capacity of 107 MW, he said, was based on recommendations from an Inter-Ministerial Committee chaired by Dr. Alfred Ofosu Ahenkora, Executive Secretary of the Energy Commission.
The committee’s report highlighted the excess energy production and the financial burden it would impose on the power sector if all PPAs were implemented as originally scheduled.
Agyarko elaborated on the committee’s findings, stating, “Based on the 2018-2030 demand supply capacity balance and the tariff rank of this project, the full capacity of this project will be excess (idle) resulting in an estimated total cost of USD 115.48 million within the duration of the PPA. The likelihood of the Plant being idle is further heightened by the fact that it is a pure natural gas-fired turbine to be located in Tema where there is inadequate gas to feed it.”
The former minister emphasized that the decision to terminate the agreement was not taken lightly. He said, “This is an Emergency Plant with a 5-year PPA, used plant (not new), and high tariff. Major equipment has arrived at the Tema port awaiting tax exemption to clear.”
The former Minister further explained that the termination recommendation was thoroughly reviewed by Cabinet and subsequently approved.
He noted, “In respect of the GPGC PPA, the report recommended the termination of the PPA with an estimated loss of USD 18 million or else pay an excess capacity charge of USD 24.90 million per annum over the contract period of 4 years.”
“These are the facts which I know are available to the Honourable Minister,” he added.
