GH¢12 billion paid for power not used – The cost of NDC’s Pay-or-Take contracts

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Ghanaians have enjoyed stable electricity supply since 2017 as opposed to the dreaded ‘Dumsor’ they endured from 2011 to 2016.

The interesting part is not only having the ingenuity of the managers of the economy kept the lights on at affordable prices, but they also have miraculously extended power to a segment of Ghanaians since the incidence of COVID-19 till now for Free. Yes, the free power policy of Akufo-Addo led NPP.

The change in the tune from ‘dumsor’ to free electricity could not have been possible without the Finance Minister-designate, Ken Ofori-Atta having not been resourceful since 2017 to 2021 to meet Ghana’s financial commitments to Independent Power Producers (IPPs).

Painfully yet plainly Ghanaians had to go through ‘dumsor’ partly due to government’s inability to pay IPPs to keep the lights on.

We don’t have to look further for confirmation. Under persistent pressure in 2015, the then Deputy Power Minister, John Jinapor admitted that money was partly to blame for the excruciating power challenges Ghanaians endured.

The persistent unreliable power supply was compounded by bad Power Purchase Agreements (PPAs) that saddled the nation with huge debts in the energy sector. Sadly but admittedly this avoidable energy sector debt still poses a threat to the economy for adding up to the country’s debt stock.

Through the instrumentality of Mr Ofori-Atta, government has been able to pay much of the huge debt inherited in the energy sector to ensure that Ghanaians never experienced the dreaded dumsor that brought about painful socio-economic crisis to all.

The Finance Ministry has so far paid over GH?12 billion as the cost of excess energy capacity charges inherited since 2017 just to keep the lights on. Yes, this huge amount was paid for electricity that the country did not use(excess capacity) but had to be paid anyway due to the nature of power contracts signed during the era of the past government.

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