Ghana’s plans to stop paying for power that it doesn’t consume may cost the country as much as $2 billion in upfront claims.
In July, Ofori-Atta said Ghana is paying about 2.5 billion cedis ($454 million) per year for power that it doesn’t need through so-called take-or-pay contracts, which typically compel buyers to compensate service providers regardless of whether they consume a service or not. In addition, Ghana will pay as much as $850 million from 2020 for excess gas, he said.
“What happens to the investor?” said Apetorgbor. “Who maintains that plant? You cannot just get up and say you want to remove the take-or-pay?”
Deputy Finance Minister Charles Adu Boahen declined to comment when contacted by text message.
Most of the deals were negotiated from 2013 to 2015 when Ghana experienced chronic power outages because the government didn’t have funds to pay for fuel while hydroplants were idled by insufficient rains. Lenders were hesitant to provide more finance for state-owned utilities, creating opportunities for private operators, of which some received government guarantees.
Private producers are already frustrated by late payments, transmission losses and the government’s indebtedness to power distribution utility, Electricity Co. of Ghana, exacerbating the risk of negotiating new terms, said Apetorgbor.
“There are things to tackle,” Apetorgbor said. “Then we can come to negotiate.”