Boakye Agyarko Justifies Termination Of GPGC Power Purchase Agreement

Former Minister for Energy, Boakye Agyarko has stated that, the decision to terminate a Power Purchase Agreement (PPA) with the Ghana Power Generating Company (GPGC), a subsidiary of Singaporean firm Trafigura, was due to an estimated potential loss of USD 18 million or the obligation to pay an excess capacity charge.

A conversation about the termination of the contract in 2019 has been sparked after it was reported that the Ghana High Commission building in the United Kingdom, the commissioner’s residence, the Ghana International Bank building, and other properties are at the mercy of a $140 million judgment debt slapped at the country by a UK court for the termination of the said contract.

Justifying the termination in a statement in reaction to a comment by Hon Kwabena Donkor, a Minister for Power under the erstwhile Mahama administration, Mr Agyarko said the decision was based on a report by an 18-member committee.

He said the report recommended the termination of the contract after finding it would cost the country an estimated loss of USD 18 million or payment of an excess capacity charge of USD 24.90 million per annum over the contract period of 4 years.

“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 purely natural gas-fired turbine to be located in Tema where there is inadequate gas to feed it” he quoted in a portion of the report.

He said the report was presented to the Cabinet and then the Attorney-General at the time before a subsequent approval for the termination.

Kwabena Donkor’s Comment
Kwabena Donkor under whose tenure the Agreement with GPGC was signed was cited as saying the termination “made no sense commercially and legally”.

However, Mr Agyarko in his statement said his comment was “ill-informed”.

“I deem the utterances most unfortunate and irresponsible coming from a former Minister who ought to know that it is not within my power or province, or that of any Minister to unilaterally cancel or terminate a contract of this nature.”