Uses Over US$1 Billion To Settle US$310.768 Million Deal; VRA and Others Angry
Ghana’s Energy Minister, Boakye Kyeremateng Agyarko and some elements within the Akufo-Addo government, have committed the country into one of the dirtiest power deals in the history of the nation.
Their lack of prudence and perhaps deeply hidden interests has left many institutions, including the Volta River Authority (VRA) angry.
The government is buying out the Africa and Middle East Resources Investment Group (AMERI) Energy at a cost of US$310.768 million, and going into an arrangement with a subcontractor of AMERI; Metka Energy to cost Ghanaian taxpayers a colossal US$1,070. 1 billion for a period of 15 years.
The current AMERI Energy transaction between Ghana and the Dubai owners of the power plant, expires in 2020 for ownership to be transferred, but the Akufo-Addo government, has rushed for a buyout, extending the time and increasing the amount to be paid, instead of getting VRA to run the plants in two years’ time at a cheaper cost to Ghanaians.
Ghana, currently pays AMERI a yearly rate of US$102.1 million, and has only two more years to complete the five-year deal negotiated by the Mahama administration, but the Akufo-Addo regime, is committing the country to a yearly payment plan of US$71.3 million to Metka Energy through its special company called, Mytilineous International Trading Company for the next 15 years.
The deal smells of massive kickback. Indeed, many energy experts, have described it as a massive rip-off, while think-tanks, including the Africa Centre for Energy Policy (ACEP) which the New Patriotic Party (NPP) respected in the past, is asking Ghanaians to reject the deal, saying it is one of the worse ever transactions in the energy sector.
Insiders revealed to The Herald that, discussions with Metka Energy, were done behind AMERI Energy, and that the Dubai owners of the Power Plant, only got to know of the negotiations when officials of Metka Energy through their Special Purpose Vehicle (SPV) Mytilineous International Trading Company, approached them to buy the power plants from them.
Mr Philip Addison, is reported to the lawyer for Mytilineous International Trading Company, helping them buy out AMERI Energy.
He led the 17-member Ministerial Committee which went to Dubai to investigate AMERI. The Dubai-based company paid for their airfare, hotel bills, food, shopping and gave them pocket money.
His damning report that the contract was inflated and ridden with corruption, was later shredded by another legal opinion by the Attorney-General.
Interestingly, opposition has intensified against the new arrangement on the AMERI power with senior staff members of the VRA, also declaring their opposition to the new arrangement..
The Senior Staff Association and the Public Services Workers Union at the VRA, have said the new deal “will bring more hardship to the good people of our dear country- Ghana.”
The agreement covering the new deal was laid before Parliament last Thursday for approval.
But the staff contends that, Ghana, had just less than two years left to assume control of the plant under the old deal.
“In less than two and half years the AMERI plant would become a free asset to the nation under the Build Own Operate and Transfer (BOOT) arrangement, and therefore there is no need for another arrangement that would extend ownership to any other third party interest,” the workers argued in a statement.
“The proposed new agreement before Parliament would be more expensive than the current arrangement and does not make any financial and economic sense to the nation. The nation has surplus generation capacity and does not require any new long-term take or pay arrangement, more so when it is inimical to the interest of the nation.”
The John Mahama administration in 2015 signed a contract with Africa and Middle East Resources Investment Group (AMERI) Energy, to rent the 300MW of emergency power from AMERI.
This was at the peak of the country’s power crisis.
The power agreement with UAE-based AMERI Energy deal cost $510 million.
But according to the NPP administration, it found out that the government had been shortchanged by AMERI as they presented an overpriced budget, and were overpaid by $150 million.
The Akufo-Addo administration, thus commenced a renegotiation process to ensure value for money. This latest deal is what it views as a better option for the country. But observers have called it a huge misstep.
The Africa Centre for Energy Policy (ACEP) wants Parliament to reject the renegotiated AMERI deal.
“We are committing to pay $50m for 15 years which is not on for the Ghanaian public and I hope Parliament will protect the public by rejecting the AMERI amendment,” Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye stated.
The Institute of Energy Security (IES), has also said the country risks paying more when the deal is agreed upon, in its current form.
The energy think tank, believes the country risks paying more when the deal is agreed upon, in its current form.
The IES, also cautions that the situation is dire at a time where Ghana cannot lay claim to the power generating plant after the timeline is reached with the new arrangement.
“If you bring in a new deal that brings us back to 11.7 cents per kilowatts hour, are you doing us good? Because when you look at the total average cost per kilowatt hour in the existing agreement, you will have somewhere around 11.45 cents per kilowatts hour, thus you putting the first five years against the 14.591 and the next fifteen years against the 10.414 per kilowatts hour,” the Executive Director of the IES, Kwasi Anamua Sakyi told Citi Business News.
He added, “On average terms, over the twenty year period, we will be paying 11.45 cents per kilowatts hour. In the proposed agreement, we are seeing a tariff charge of over 11.7.”
Kwasi Anamuah Sakyi, insists the arrangement has no merit.
“In fact, when you do the calculation, we are going to pay within the fifteen-year period, about 1.6 billion dollars in the new agreement. We think that this will not help Ghana and we are urging Parliament not to approve of this new deal because it is going to cause us more than what we have currently,” he stressed.
More to come!