Alex Mould, a
former Chief Executive Officer of the Ghana National Petroleum Corporation
(GNPC), has chided government’s assertion that it made over $7 billion savings
from the cancellation of some Power Purchase Agreements (PPAs) signed in former
President John Mahama-led administration.
He explained that a PPA is signed between Independent Power Plant (IPP) investor and the off taker. In this case Electricity Company of Ghana (ECG), and that nowhere was the government directly a party to the agreement and insisted that “the government is only involved when the investors’ financiers require a guarantee to mitigate political risk”.
According to him, “since the government is not obliged to give such political risk support to IPP development, in form of a Government Consent and Support Agreement (GCSA) or a Put/Call Option Agreement (PCOA), unless of course the government wants particular IPP developed, PPAs will expire worthless as no IPP can be developed without explicit support and assistance of the government.
“A PPA is not the end of transaction, rather necessary requirement to get investor’s financiers interested in commencing approval processes since IPP investors has not reached financial investment decision to move forward with IPP projects.
“They thus have not committed, dedicated and determined financially to project, this cannot be said to be costing the government significantly, let alone $7billion, how then does cancelling the number of PPAs when investors’ financiers have not committed, dedicated and determined IPPs with no mention of accompanying GCSA/PCOAs, save the government so much money?”
“References are disturbingly misleading to the public, can only be alleged either from
Such references are disturbingly misleading to the public, can only be alleged either from