The Executive Director of Africa Centre for Energy Policy (ACEP), Dr. Mohammed Amin Adam has described the US$700 million deal by the Government of Ghana (GoG) and Ameri Energy Group of Dubai for a 250 MegaWats (MW) generating unit, as a bad deal. He said per its terms it is a bad one and in “our view it is the most expensive deal Ghana will ever do in our history.”
According to the terms of the deal, Dr. Amin Adam said the units will be leased out to Ghana at about US$120million for a year and in addition to $16million for O&M, the total cost for will stand at $138million. It would amount to about $700million for the five years –excluding fuel cost.
He said checks with General Electric (GE) suggest that the total outright purchase cost for the total of 250MW of these units hovers around $180-$200 million. In view of this, Dr. Amin Adam stated that purchasing 250MW generating unit from Dubai for $700 million, when that same unit could have been bought much lesser, makes no economic sense.
“We do not think that it makes any economic sense for us to lease generating units for which we will pay $700million for five years, excluding fuel cost, when we could have bought these generating units outright for $200 million. It doesn’t make any economic sense to us,” he pointed out.
As part of government’s measures to mitigate the current power crisis –which has caused the collapse of many indigenous firms, it has out of desperation entered into an arrangement with Ameri Energy Group of Dubai for a 250MW generating unit –which consist of 10 set of GE TM 2500 power plants each, consisting of 25MW under mysterious arrangements.
He, therefore, called on the government to fully disclose all the terms associated with the power barges and justification of value for money in those transactions.
Also he urged government to fast track negotiation for the interconnection project between the Atuabo Gas pipeline and the West African Gas pipeline to reverse stranded gas from Takoradi to Tema for use by power plants.
The President, John Mahama in his determination to fix the power crisis announced last Thursday, during the State of the Nation Address that a total of 3,800MW of additional generating capacity is being rolled out over a five year period.
It was refreshing that a long-term approach is being adapted to solving the challenges facing the energy sector, Dr. Amin Adam said, as ‘shortermism’ had never provided a permanent solution to the crisis.
Successfully adding that figure of 3,800MW to the generating mix would be unprecedented, he observed, given that “this capacity will be more than all the installed capacity of our country built over 50years –from the era of Dr. Kwame Nkrumah to date is 2846MW.”
However, Dr. Amin Adam disclosed “we see the promise by our president to be a big dream. 3,800MW in 5years is indeed a big dream.”
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