The Chairman of the Mines and Energy Committee of Parliament has claimed that the power purchase agreements signed by the previous John Mahama-led government were highly unfavourable and detrimental.
Speaking to journalists at a press conference, he said the Mahama-led government entered into 43 take-or-pay power purchase agreements, resulting in the current government being obligated to pay over 320 million dollars in 2018 for unused power charges.
The lawmaker stated that the agreements had a serious financial burden on the state.
He said the haste with which the previous government made these decisions has had a severe impact on the energy industry.
“In 2018, excess generation capacities contracted under the take or pay cost 320 million in capacity charges and are estimated to increase to 620 million annually with the addition of new plants in 2019.
“These unused supply charges are one of the significant sources of financial strain on the sector. Cumulative net sector debt was 2.7 billion in 2018 with 30 percent payable to the private sector, this sum is equivalent to 33 percent of the 2018 government’s tax revenue highlighting the scale of the financial burden.”
He added that the recent remarks made by Pierre Frank Laporte, the World Bank Country Director for Ghana which generated mixed reactions were nothing but the truth.