The World Bank Country Director, Pierre Laporte has said the Power Purchase Agreements (PPAs) entered into by the Mahama administration were poorly negotiated.
He, therefore, called for an urgent review of what it described as “wrong and expensive” agreements.
Speaking to the media recently, he said “In the aspect of Ghana, those contracts you signed with the PPA are too expensive.
“The kind of PPA you signed, it means Ghana is paying for electricity not in use through doubling of capacity.
“The fact is, in the last few years, Ghana entered into some PPAs that were wrong. These types, in our view, were at the wrong rate and at the wrong prices and today you’re paying duly for it. And today the country is being billed for many of these wrong PPAs”, the World Bank Country Director, Pierre Frank Laporte told Joy News in an interview.
“I know that the government has started some talks with the IPPs to renegotiate some of these PPAs,” he stressed.
The Akufo-Addo government has been hailed for its ability to pay for power generation for over six years, thus ending the over four-year dumsor Ghana faced due to the erstwhile Mahama government’s inability to pay for power generation.
The erstwhile Mahama government signed a number of Power Purchasing Agreements (PPAs) before losing power in 2016.
The agreements, numbering over 40, committed Ghana to over $1 billion dollars of take or pay contracts for excess power.
President Nana Akufo-Addo, in his first State of the Nation Address, announced his government would renegotiate a number of the agreements in order to free the government of the “mountain” debts, an exercise which was carried out with the renegotiation of about 11 of the power deals.
Nonetheless, Ghana was still left with other debt commitments of the remaining agreements which have so far cost the country over 12 billion dollars due to what has been described as reckless signing of agreements in energy sector by former President John Mahama.