Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 46

TO STABILISE GHANA POWER , THE ANSWER IS SIMPLE : MONEY
Energy think-tank , Africa Centre for Energy Policy ( ACEP ), barely a week after 2016 general elections , demanded that the new government reviews all existing Power Purchase Agreements .
ACEP argues that it was imperative for government to pull out of some of the agreements since most of the companies have not yet secured funds for the projects even though they have expressed interest .
“ All emergency power contracts that have failed to deliver on time would have to be cancelled or renegotiated into a regular IPP to save cost . The high tariffs associated with the emergency plants are not appropriate for long-term economic planning and protection of industries ,” the energy policy think-tank said .
Millennium Compact
The government of the United States of America ( USA ) has agreed to support the nation ’ s energy sector with a US $ 500million grant , but Ghana must meet some criteria before the release of the money .
As part of the conditions for the release of the Millennium Challenge Compact money , the US government insisted that the government of Ghana settles its bills , which is part of the socalled legacy debt in the energy sector , and for which the Energy Sector Levies were introduced .
The government has since made some payments , although the huge chunk remains to be cleared . Last year government , a report of the Finance Committee of Parliament said government had , in five quarterly instalments , paid a total of GH ¢ 180million to the ECG , in what is christened the Electric Distribution Utility Payment Action Plan .
The Committee referred to the payments as constituting “ substantial compliance ” with one of the conditions the country must meet before the US $ 498million MCC money is released in full .
As part of the Millennium Challenge Compact II , government is expected to settle all its outstanding debts to ECG before a private entity takes over the management of the company . The money from the compact is to be used for , among other things , an ECG Financial and Operational Turnaround Project , a NEDCo Financial and Operational Turnaround Project , and a Regulatory Strengthening and Capacity Building Project . The country ’ s power generation situation
Current electricity demand for the country stands at about 2,225MW . This is growing by 10 percent per annum and is expected to hit 7,000MW by
2030 .
Presently , VRA and other Independent Power Producers ( IPPs ) together have an installed capacity of 3,644MW .
However , constraints on fuel sources for power generation -- crude oil , gas and water for hydro power generation -- have necessitated the need for exploring cost-effective , reliable , and clean energy and power sources . Given the current gas demand of about 450Mscf per day , indigenous gas and limited supply from the West Africa Gas Pipeline are unable to meet demand . Available indigenous
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