The Chamber of Independent Power Producers, Distribution Companies and Bulk Consumers (CIPDiB) has called on the government to tread cautiously before taking a decision to terminate the power agreement with Power Distribution Services (PDS) Limited or review take-or-pay power purchase agreements to avoid litigation that could prove costly to the nation.
The government suspended the concession agreement with PDS last Monday for what it described as “fundamental and material breaches of PDS’ obligation in the provision of Payment Securities for the transaction” which had been discovered upon further due diligence.
However, the chamber said the signing of the concession agreement meant that both parties were satisfied with the processes and so any attempt to abrogate the agreement by the government ought to be done in a manner that would not cause the state to suffer losses.
“Two parties to this power arrangement came together, and after expressing satisfaction with the terms of engagement, signed it. So if the government is coming back to say that it cannot continue with this kind of agreement, it has to be done with caution to avoid a heavy cost or embarrassment,” the Chief Executive Officer (CEO) of the chamber, Mr Elikplim Kobla Afetorgbor, stressed.
Speaking to journalists at the inauguration of the 15-member Board of the CIPDiB in Accra yesterday, Mr Afetorgbor said the chamber would respond to the specific details of its position on the matter “at the appropriate time”.
The call by the CIPDiB comes on the back of the suspension of the concession agreement with PDS for what has been described as “fraudulent” deals by the company.
The Minister of Finance had also announced in Parliament last Monday that pay-or-take power agreements in the power sector would be reviewed.
However, Mr Elikplim said the government had not engaged the IPPs on any move to renegotiate the agreements.
“We only heard the Minister of Finance, Mr Ken Ofori-Atta, in Parliament announcing that pay-or-take agreements will be reversed, but we have not had any notification about the renegotiation,” he said.
The CIPDiB Board is chaired by Togbe Afede XIV, the President of the National House of Chiefs and director of Sunon Asogli Power (Ghana Limited), operators of the Sunon Asogli Thermal Power Station.
The members are a former Chairman of the Public Utilities Regulatory Commission (PURC), Mr Kwame Pianim; the Director of Cenpower Generations, Nana Sam Brew- Butler; the Chairman of Sunon Asogli Power Ghana Limited, Mr Qun Yang; a board member of Early Power Limited, Mr Reginald France, and the CEO of the Volta Aluminium Company Limited (VALCO), Mr Daniel Acheampong.
Others are the Managing Director of B5 Plus Limited, Mr Bhavesh Kumar; the Country Director of Aksa Energy, Mr Murat Captug; the Managing Director of BXC, Mr Kelvin Wu, and the Country Manager of Karpowership, Mr Volkan Buyukbicer.
The rest are the CEO of CENIT Power, Mr Victor Noja; the Managing Director of Enclave Power, Mr Norbert Anku, and a former Commissioner of the PURC, Mr David Kwadzo Ametefe.
Speaking after the inauguration of the board, Togbe Afede called for commitment on the part of members and other stakeholders to address the power challenges in the country.
“As the chairman of this board, I call on all who matter to serve the national interest by working hard and diligently to give the country stable power,” he said.
He said the wealth of knowledge that members of the board had would be put to good use to support the government’s agenda of providing reliable power for all citizens.
He underscored the need for capacity building and leveraging appropriate technology as key requirements for a robust energy sector.
The General Manager in charge of Regulatory and Governance Affairs at the ECG, Mr Ebenezer Baiden, lauded the chamber for bringing together key stakeholders in the power sector.
He described the setting up of the chamber as timely, especially when there was an urgent need for stronger collaboration to overcome the challenges in the power sector.
The Director of Commercial Services at the Volta River Authority (VRA), Dr Isaac Adjei Doku, said the contribution of IPPs to the power sector was immense and necessary for national development.
“The VRA views IPPs as collaborators, rather than competitors, in power generation. We shall continue to work together to address the power challenges,” Mr Doku said.