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The minority in Parliament challenged the government's position that the country has an excess of power, resulting in the termination of some contracts.
Finance Minister Ken Ofori-Atta, in his presentation of the Mid-Year Budget Review in Parliament on Monday, said the country was paying for a power it did not need.
This, he said, led them to terminate certain liquefied natural gas (LNG) contracts in 2017 to save the taxpayer money.
Argument of the Minister of Finance
"Currently, according to the Energy Commission, our installed capacity of 5,083 MW is almost double our peak demand of approximately 2,700 MW. In particular, 2,300 MW of installed capacity were subscribed to the card. This means that we are contractually obliged to spend money for this excess capacity that we do not consume. That allowed us to pay more than half a billion US dollars, or more than 2.5 billion GHS a year, for a power generation capacity that we do not need.
Ofori Atta presented the mid-year budget to Parliament on Monday.
Similarly, with respect to gas, Ghana has signed contracts for approximately 750 million cubic feet per day by 2023. Even after the government terminated two other LNG contracts in 2017, the current demand is about 250 million cubic feet per day. 550 million cubic feet per day by 2023. About 640 million cubic feet of contract gas supply is for consumption, which means we have to pay, that we use it or not. From 2020, if nothing is done, we will face excess gas capacity royalties of between $ 550 and $ 850 million a year. "
In response to the finance minister on Tuesday, John Jinapor, a member of Parliament's Mining and Energy Committee, said the excess capacity was a result of the government's inability to significantly increase access to electricity.
The MP for Yapei Kusawgu said that according to the 2019 budget, the NPP government had "increased access to electricity by 1% derisory over the two years in power."
John Jinapor
"And you have the audacity to say that you have too much power," Jinapor asked.
He added: "… growing at this snail pace, you will have excess capacity and you will not know what to do with it."
The legislator, who was Deputy Minister of Electricity in the former administration, has touted the fact that the government led by John Mahama has expanded by 5% per year access to electricity throughout the country. This, he said, can be confirmed by the 2017 budget presented by the current administration.
NDC's position on take-away contracts
Member of the National Democratic Congress and former CEO of the Ghana National Petroleum Corporation, Alex Mold blamed the government for reacting at the presentation of the Minister.
Ofori-Atta said the government intended to renegotiate all the "à la carte" contracts.
But, according to Mold, this would scare investors because the government can unilaterally reduce its demand and the suppliers would suffer losses.
In addition, he said, "the government should provide even greater security enhancement programs to finance the development of these Gas2Power gas fields."
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