NDC stifles with "Take-or-Pay" agreements | Economy

Former Finance Minister, Seth Terkper, claimed that the National Democratic Congress (NDC) administration had begun renegotiating firm purchase agreements that paralyze the energy sector.

However, he stated that they could not succeed in converting the firm purchase agreements into purchase and payment transactions because of what he called the usual delays in the conclusion of renegotiations.

Interestingly, Mr. Terkper, referring to Citi FM, after Finance Minister Ken Ofori-Atta read the mid-year 2019 budget review on Monday, could not designate a single renegotiation agreement, but could require that the New Patriotic Party) the administration should not welcome the efforts of catch and remuneration.

Controversial Agreement

The take-or-pay agreement was designed so that, whether or not independent producers produce energy, the country pays them huge amounts of royalties.

It is at the time of the Mahama NDC administration that most of these controversial agreements were signed. As soon as the NPP took office, Minister Boakye Agyarko began calling the electricity producers to return to the negotiating table because the country could no longer support the odious agreements. .

The Minister of Finance told Parliament that the government had decided to "convert all firm purchase contracts into firm purchase contracts".

"As a result, as of August 1, 2019, the government must pay for the energy and gas we actually consume. All take-or-pay contracts will be renegotiated to be converted to take-and-pay for PPAs and Gas Supply Agreements (GSAs). The government will seek ratification of Parliament, if appropriate, "adding that the NPP administration was suspending" indefinitely or terminating all agreements for the purchase of projects under negotiation. "

He also stated that they had decided "to immediately impose a full moratorium on the signing of new power purchase agreements and option agreements". 39, call-purchase (APAC) ", as well as" to submit all future competitive and transparent electricity purchase contracts. " The government will therefore no longer accept unsolicited proposals.

He added that, among other measures, they had resolved "to apply the distribution of orders to economic merit, which means that the most efficient plants will be shipped first", as well as "to improve the performance of the public service. distribution and has approved the concessionaire a plan to reduce power losses and increase collections on the basis of an agreed investment plan ".

Mr. Terkper was categorical: "This (arrangement to be taken or paid) is not something particular to the Mahama administration. It's not unique to the Mills administration. Bui Dam, Sonon Asogli and others that were signed at the time of the NPP are a la carte. "

"It's the Mahama administration that has been trying to move from support to PCOA (buy / sell option contract), which means you're paying for what you're taking. As usual, implementation has been delayed. We had already started the process of switching to the anticipated sale option. It's verifiable, "he said.

He added that "… we were working with the World Bank to organize a meeting on these conditions, including whether we should use gas and LNG and discuss with the IPPs and start the process. negotiation. All new agreements had to be on the PCOA, the old ones to negotiate and that's exactly what the minister is announcing as it's new, "he added.