Ghana is on the verge of a severe power crisis in the coming days if immediate measures are not taken to address an outstanding debt of $1.73 billion owed to the Independent Power Producers (IPPs).
The IPPs have issued a renewed ultimatum, threatening to shut down their plants starting July 1, 2023, unless the government provides an interim payment of 30% of the outstanding debt.
The IPPs argue that without receiving payment within the next few days, they will be unable to sustain the national grid beyond June 30.
In an interview on the Citi Breakfast Show on Tuesday, June 27, Elikplim Kwabla Apetorgbor, the Chief Executive Officer of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), expressed their inability to convince creditors, contractors, and other essential stakeholders to further delay payments and maintain operations.
Elikplim Kwabla Apetorgbor
“Basically we are saying that we lack the resources to continue generation beyond 30th June and we are giving them [Finance Ministry] up to March. We didn’t hear from them but the fact is beyond June we just don’t have the resource to continue to supply.”
Mr Apetorgbor added that “all the IPPs are operating on borrowed funds and the critical part is our ability to pay our debt. The second quarter is about to end, so the six of us have no resources to continue to supply, so we are not going beyond June 30th.
Mr Apetorgbor also stated that the IPPs have rejected any form of debt restructuring because they cannot explain to their lenders that Ghana’s economy is in shambles and are unable to repay their debt.
“We have sacrificed a lot for the economy, the debt in question is already debt we have borrowed from our lenders and we can’t explain to them that we can’t pay because Ghana’s economy is in shambles, they won’t listen.”
Independent power producers play a significant role in Ghana’s energy sector, controlling 47 percent of the country’s total power generation mix and contributing 67 percent of Ghana’s thermal power.
As of May 2021, the six enterprises collectively claim an outstanding debt of approximately $1.73 billion in cedis, with the debt dating back to January 2021.
The IPPs highlight that this debt has hindered their access to working capital, preventing them from financing crucial inputs such as chemicals for water treatment in thermal generators and other supplies, many of which are priced in foreign currency, primarily the US dollar.Source:Kobina Welsing
The Minority has noted with serious concern the decision by President Akufo-Addo to attack the person of former President Mahama during the commissioning of the 161kv Bulk Supply Point at Accra Central, which President Mahama initiated.
For the record, the Mahama led government in 2014 requested for grant aid from Japan to construct the 161kv Bulk Supply Point to be located in the Central Business District of Accra, to adequately and reliably meet the high electricity demand in the area, which was growing at a rate higher than the system average of 10% per annum.
We wish to emphasise that all the necessary, regulatory, financial and technical approvals were secured under President Mahama, with actual construction works commencing in 2016 before he handed over power to the current administration.
This can be verified from the 2017 and 2018 GRIDCO Annual Reports as well as the “2015 Preparatory Survey Report on The Project for Power Supply To Accra Central In The Republic Of Ghana” published on the JICA website.
Former President’John Mahama
President Akufo-Addo
It is therefore surprising that rather than commending his predecessor for initiating the New Bulk Supply Point, described as a gamechanger by the current GRIDCo Board Chair (https://mobile.ghanaweb.com/GhanaHomePage/business/New-Bulk-Supply-Point-for-Accra-Central-is-a-gamechanger-GRIDCo-Board-Chair-1785623), President Akufo-Addo rather chose the occasion to make baseless, inaccurate and unfounded allegation against former President Mahama.
If President Akufo-Addo truly wants to know who ended Dumsor, he may want to consult his own Vice-President, Dr. Mahamoud Bawumiah who is on record to have stated that Mahama ended Dumsor (https://www.ghanawish.com/mahama-solved-dumsor-but-deserves-no-credit-for-that-bawumia-video/).
If President Akufo-Addo cannot recognise the enormous contribution of President Mahama in the energy sector, the least he could do was to refrain from such unwarranted attacks, particularly at a programme to commission a project which is the brainchild of President Mahama, as the saying goes “you do not bite the hand that fed you”.
The Minority wishes to caution in the strongest terms possible that it will no longer tolerate such unwarranted and pedestrian attacks on President Mahama by this non-performing government in a desperate attempt to tarnish his image.
It is an incontrovertible fact that President John Mahama laid a solid foundation in the Power Sector, with a clear vision of exporting Power as evidenced by the completion of the 330kv Kumasi – Bolgatanga Transmission Project, which has enabled Ghana to export power to neighbouring Burkina-Faso.
On the contrary, the Akufo-Addo/Bawumiah led government, having added no value to the sector, will go down in history as the worst Government as far as the Power sub-sector is concerned.
John Abdulai Jinapor Ranking Member (Mines and Energy Committee)
The Minister of Lands and Natural Resources of Ghana, Samuel Abu Jinapor, has stated categorically that Ghana will not export unprocessed Litium to the international market in it’s raw state.
He explained, the government of Ghana is determined to add value to the country’s Mineral resources, create jobs, and generate more revenue to support the growth of African number one gold ducking country GDP.
Speaking at the Bloomberg New Economy Gateway Africa summit in Marrakesh in Morocco the Minister informed the international community of the government’s commitments to add value to its natural resources.
The Damango member of Parliament further explained at the ongoing summit that the Ghanaian government is working on a policy framework to retain a significant portion of Mineral resources, such as Lithium, and add value to it before exporting it.
The policy framework is intended to safeguard Ghanaian interests in relation to the production of lithium and other minerals.
Ghana has discovered commercial quantities of lithium spodumene in the Central region along the lithium belt of Cape Coast.
Ghana had previously exported gold, oil, and diamonds in their unprocessed form, depriving the country of enormous revenues from added value for economic growth and development.
“We intend to end the practise of not adding value to our mineral resources.” We are beginning by establishing the appropriate policy and legal frameworks for Ghana to significantly benefit from the new paradigm of renewable energy, the Minister said that in Marrakech, Morocco.
Bloomberg’s ‘New Economy Gateway Africa’ summit brought together leaders from the world’s private and public sectors to discuss the world’s most pressing issues and evaluate potential solutions in the context of local and regional priorities, focusing on the impact of a slowing global economy; rising food and energy prices; supply-chain shocks; tightening financial conditions; and the rising risk of distress among sovereign borrowers.
This two-day summit began on Tuesday, June 13, 2023, and will conclude on Wednesday, June 14, 2023.
“WE’RE NOT GOING BACK TO DUMSOR; WE LEAVE THAT TO MAHAMA” – PRESIDENT AKUFO-ADDO
“I wish to reassure you all that my government will continue to work towards “Keeping the Lights on”, in spite of the global dynamics of energy pricing, because the alternative is not an option. We are not going back to dumsor, we leave that to President Mahama.”
These were the words of the President of the Republic, Nana Addo Dankwa Akufo-Addo, on Tuesday, 13th June 2023, when he commissioned the 161 kilovolt GRIDCo, ECG Bulk Power Supply Point, constructed under the Project for the Reinforcement of Power Supply to Accra Central.
Addressing the gathering, President Akufo-Addo noted that in the 21st century, any country that aspires to industrialise, as part of its economic agenda, and assure its people of a decent quality of life, must necessarily ensure that its citizens have access to stable, efficient, affordable power supply
“Our daily lives, from simple things such as charging our mobile phones, and keeping our electrical appliances working, to operating our offices and businesses, are run by electric power. Electricity is no longer a luxury but rather a necessity in this day and age, and we must commit ourselves to working hard to ensure that we achieve universal coverage in this country in order to spur on rapid rates of economic growth,” he said.
The President noted that the power needs of Accra’s Central Business District have important implications for our economy, with projected electricity demand rate of residents and commercial establishments, operating within Accra Central and its environs, standing at ten percent (10%) per annum.
In addition, power demand in Greater Accra is projected to reach about one thousand megavolt-ampere (1,000 MVA), with an average annual growth rate of some eight percent (8%).
“It is evident that the execution of the Accra Central BSP project is consistent with the country’s power needs and development, with a GDP growth rate of up to fifteen percent (15%) around the time of project preparation,” he said.
President Akufo-Addo continued, “The project we are commissioning today is a one hundred and sixty-one kilo-Volt Bulk Supply Point, which delivers on government’s commitment to “Keep the Lights On”. It also guarantees stable, reliable and regular supply of electricity for the busy and bustling Accra Central Business District and surrounding areas.”
The Accra Central Bulk Power Supply Project, indeed, project could not have become a reality without the generous grant from the Japanese Government and its external agency, the Japanese International Development Agency (JICA), and without Japanese technology and technical assistance.
On behalf of the government and people of Ghana, the President extended deep appreciation to the Japanese Government and the Japanese Consultants, a Joint Venture of Yachiyo Engineering Co., Ltd. and West Japan Engineering Consultants Inc; the main Contractor, a Japanese Joint Venture of Mitsubishi Corporation, Hitachi Plant Construction, Ltd., and Yurtec Corporation, for the efforts and continuous support and contribution to Ghana’s development and growth.
“This project is an excellent illustration of the strong co-operation that links the Republic of Ghana and the Kingdom of Japan, which we cherish very much. My gratitude also goes to the Electricity Company of Ghana (ECG) for providing access to part of the compound of its Primary Substation E, which facilitated the construction of this Accra Central BSP. I also wish to thank all traditional leaders, as well as the Ghana Railway Development Authority, for access to the transmission line right-of-way,” he said.
President Akufo-Addo further expressed gratitude to the leadership of the Presbyterian Church of Ghana and families in this area, “who ceded part of their lands to pave way for the building of the transmission tower that provides a critical connection point from the BSP for onward connection to power supply.”
About Accra Central Bulk Supply Point
This Bulk Supply Point is a gas insulated sub-station, which is GRIDCo’s first sub-station with such technology. This is an innovation in technology applied in areas where spaces are significantly limited, thus large capacity switchgear and transformers, which are compact, can be installed.
The benefits of this Accra Central Bulk Supply Point, amongst many others, are to reduce transmission and distribution losses, ensure high reliability of electricity supply, and ensure a high level of personnel safety.
With the operationalisation of the Accra Central BSP, power voltages have become stable (protecting valuable equipment), power supply reliability has improved, and, with this, efficiency has been restored, reducing system losses as required by the regulator, Public Utilities Regulatory Commission (PURC).
“I wish to reassure you all that my government will continue to work towards “Keeping the Lights on”, in spite of the global dynamics of energy pricing, because the alternative is not an option. We are not going back to dumsor, we leave that to President Mahama.”
These were the words of the President of the Republic, Nana Addo Dankwa Akufo-Addo, on Tuesday, 13th June 2023, when he commissioned the 161 kilovolt GRIDCo, ECG Bulk Power Supply Point, constructed under the Project for the Reinforcement of Power Supply to Accra Central.
Addressing the gathering, President Akufo-Addo noted that in the 21st century, any country that aspires to industrialise, as part of its economic agenda, and assure its people of a decent quality of life, must necessarily ensure that its citizens have access to stable, efficient, affordable power supply.
“Our daily lives, from simple things such as charging our mobile phones, and keeping our electrical appliances working, to operating our offices and businesses, are run by electric power. Electricity is no longer a luxury but rather a necessity in this day and age, and we must commit ourselves to working hard to ensure that we achieve universal coverage in this country in order to spur on rapid rates of economic growth,” he said.
The President noted that the power needs of Accra’s Central Business District have important implications for our economy, with projected electricity demand rate of residents and commercial establishments, operating within Accra Central and its environs, standing at ten percent (10%) per annum.
In addition, power demand in Greater Accra is projected to reach about one thousand megavolt-ampere (1,000 MVA), with an average annual growth rate of some eight percent (8%).
“It is evident that the execution of the Accra Central BSP project is consistent with the country’s power needs and development, with a GDP growth rate of up to fifteen percent (15%) around the time of project preparation,” he said.
President Akufo-Addo continued, “The project we are commissioning today is a one hundred and sixty-one kilo-Volt Bulk Supply Point, which delivers on government’s commitment to “Keep the Lights On”. It also guarantees stable, reliable and regular supply of electricity for the busy and bustling Accra Central Business District and surrounding areas.”
The Accra Central Bulk Power Supply Project, indeed, project could not have become a reality without the generous grant from the Japanese Government and its external agency, the Japanese International Development Agency (JICA), and without Japanese technology and technical assistance.
On behalf of the government and people of Ghana, the President extended deep appreciation to the Japanese Government and the Japanese Consultants, a Joint Venture of Yachiyo Engineering Co., Ltd. and West Japan Engineering Consultants Inc; the main Contractor, a Japanese Joint Venture of Mitsubishi Corporation, Hitachi Plant Construction, Ltd., and Yurtec Corporation, for the efforts and continuous support and contribution to Ghana’s development and growth.
“This project is an excellent illustration of the strong co-operation that links the Republic of Ghana and the Kingdom of Japan, which we cherish very much. My gratitude also goes to the Electricity Company of Ghana (ECG) for providing access to part of the compound of its Primary Substation E, which facilitated the construction of this Accra Central BSP. I also wish to thank all traditional leaders, as well as the Ghana Railway Development Authority, for access to the transmission line right-of-way,” he said.
President Akufo-Addo further expressed gratitude to the leadership of the Presbyterian Church of Ghana and families in this area, “who ceded part of their lands to pave way for the building of the transmission tower that provides a critical connection point from the BSP for onward connection to power supply.”
About Accra Central Bulk Supply Point
This Bulk Supply Point is a gas insulated sub-station, which is GRIDCo’s first sub-station with such technology. This is an innovation in technology applied in areas where spaces are significantly limited, thus large capacity switchgear and transformers, which are compact, can be installed.
The benefits of this Accra Central Bulk Supply Point, amongst many others, are to reduce transmission and distribution losses, ensure high reliability of electricity supply, and ensure a high level of personnel safety.
With the operationalisation of the Accra Central BSP, power voltages have become stable (protecting valuable equipment), power supply reliability has improved, and, with this, efficiency has been restored, reducing system losses as required by the regulator, Public Utilities Regulatory Commission (PURC).
The Minister of Lands and Natural Resources, Samuel Abu Jinapor, has announced that the government will provide the necessary equipment to the staff of the Forestry Commission to combat illegal mining in forest reserves.
Mr. Jinapor stated that bulletproof vests and weapons will be provided to fight illegal miners, commonly known as ‘galamseyers,’ who have been causing destruction to water bodies.
While speaking at the commissioning of an office complex for the Forestry Commission in the Eastern Region, Abu Jinapor emphasized the need to protect the Atiwa forest and other forests, as well as combat activities that threaten the survival of forest reserves at Atiwa.
“Atiwa forest and various forests in the Eastern region are under attack from illegal miners, and galamseyers. Please rid these forest reserves of illegal miners and illegal loggers and other activities which threaten the survival of forest reserves in our country.
Samuel Abu Jinapor
“You [Forestry Commission] have our full support, whether they are high people or low people, whether they are political leaders or not, your work is to make sure that all forest reserves in this country are protected. Government will provide bulletproof vests and other weapons to aid your work,” Lands and Natural Resources Minister, Samuel Abu Jinapor assured.
In recent times, illegal miners have been arrested for engaging in unlawful mining activities within various forest reserves in the country. Source:Citi Newsroom
The Board Chairman of the Ghana National Petroleum Corporation (GNPC) and former chairman of the New Patriotic Party (NPP), Frederick Worsemao Armah Blay (Freddie Blay), has brushed aside the accusations and demands by some 29 Civil Society Organisations calling for his resignation.
This comes after the GNPC’s intention to sell a 50% stake in Jubilee Holdings Limited (JOHL) to PetroSA.
Mr. Blay stated that he had done nothing wrong in the deal to warrant his resignation.
In an interview on Eyewitness News on Citi FM, he insisted that he has a clear conscience regarding the sale of the shares and will only resign if the president, who appointed him, no longer wants to work with him.
“Possibly, I could be fired, but I don’t see any reason why they are saying I should resign about this issue. I have done nothing wrong.
I have observed my conscience and I thought I was protecting the interest of the country, and I am convinced about it and if others think otherwise and if those who appointed me are saying otherwise, then so be it.”
He also revealed that he has had conversations with President Akufo-Addo regarding the issue.
“I have spoken to the president about it, and we haven’t gotten to where he will ask for his job back.
It is not about convincing the president, the law will speak for itself and the law will talk and there are few documents on the agreement.”
He further clarified that he has no bad blood with the Energy Minister, Mathew Opoku Prempeh as reported by a section of the media.
“I don’t think we [he and Mr. Prempeh] have any differences that are so serious that they are detrimental to the interest of Ghana.
You know, NAPO has strong opinions, and I am also a little determined when I am talking about anything that I know of. We met today and we exchanged ideas brightly.”
During a press conference on Tuesday, May 23, the 29 CSOs demanded the removal of the GNPC’s Chief Executive Officer, Opoku Ahweneeh Danquah, and Board Chairman, Freddie Blay.
The CSOs alleged that Mr. Blay, in his capacity as the GNPC Board Chairman, had written to PetroSA, offering an equal split in the interest held by GNPC’s subsidiary, Jubilee Oil Holdings Ltd.Source:myghanamedia.com
Some 29 Civil Society Organisations are demanding the immediate removal of GNPC’s Chief Executive Officer, Opoku Ahweneeh Danquah, and Board Chairman, Freddie Blay.
The CSOs made up of the Africa Centre for Energy Policy (ACEP), Centre for Democratic Development (CDD-Ghana), the Chamber of Petroleum Consumers Ghana (COPEC), Imani Centre for Policy and Education and 25 others accuse the two men of working against the interest of the state.
The demand for their removal comes in the wake of GNPC’s intention to sell a 50% stake in Jubilee Holdings Limited (JOHL) to PetroSA, despite the substantial revenue potential this interest holds for the state.
Addressing the press on Tuesday, May 23, the Coordinator for the coalition, Abdul Karim Mohammed said the continuous presence of these individuals, closely associated with petroleum operations, poses significant risks to Ghana’s interests.
Mr Mohammed explained that the Energy Minister, Dr Mathew Opoku Prempeh is against a decision by the Board Chairman of GNPC, Mr Blay for offering interest in Ghana’s oil fields to a South African oil company, Petroleum Oil and Gas Corporation of South Africa (PetroSA).
Mr Blay in his capacity as the GNPC Board Chairman is said to have written to PetroSA offering it an equal split in the interest held by GNPC’s subsidiary Jubilee Oil Holdings Ltd.
“It is a viable field, and it is giving us a lot of money if we allow this to go forward. What it means is that PetroSa will be entitled to 50 percent of the earnings from the field, whereas they have not had any role in developing the field to the point where it is now viable.
“The information we have is that the Minister for Energy has objected to this transaction but the Chairman of GNPC Board is pushing this transaction to the extent that the Minister of Energy had written to the Jubilee House over this transaction.”Source:Citinewsroom.com
The Public Utilities Regulatory Commission (PURC) has concluded the Quarterly Tariff Reviews for the second quarter of 2023 as part of its regulatory mandate.
The review has resulted in the Commission approving tariff increases for natural gas and electricity for the second quarter of 2023.
The Quarterly Tariff Review Mechanism seeks to track and incorporate changes in key factors used in determining natural gas and electricity tariffs.
These factors are the Chana Cedi/US Dollar exchange rate, inflation, electricity generation mix and the weighted average cost of natural gas (WACOG).
This review has become necessary to maintain the real value of cost of supply of the utility services and to ensure that the utility companies do not under or over recover costs. While under recovery has negative implications for the ability of the companies to supply service to consumers, and has the potential of causing outages of electricity, over-recovery unnecessarily overburdens consumers of electricity. The Quarterly Tariff Review Mechanism is meant to address the above.
Since the announcement of the first quarter tariff decision in January 2023, the key variables underlying the rate setting have changed. The weighted average Ghana Cedi/US Dollar exchange rate used for the first quarter tariff review was GHC10.5421 to the US Dollar. Since then, the Ghana Cedi has depreciated against the US Dollar.
The first quarter tariff decision resulted in a 25% under-recovery of the exchange rate. This has to be recovered in order to ensure that the country does not add to the already mounting debt in the energy sector. The projected exchange rate for the second quarter plus the first quarter under-recovery is GHC12.7118 to the US Dollar.
The Weighted Average Cost of Gas (WACOG) used for the first quarter of 2023 was USD6.0952/MMBtu.
For the second quarter, as a result of an increase in price of Nigeria-Gas (N-Gas) and other factors, the applicable WACOG is USD6.5165/MMBtu.
With respect to electricity generation mix, the hydrothermal mix used for the second quarter is 29.01% for hydro and 70.99% for thermal, as against 26.11% for hydro and 73.89% for thermal used for first quarter of 2023. Hydro allocation of 29.01% helped to reduce the impact of changes in the macroeconomic variables and the WACOG on the tariff.
The net effect of the Ghana Cedi/US Dollar exchange rate, inflation, WACOG and electricity generation mix is that the utility companies are under-recovering and require an upward adjustment of their rates in order to keep the lights on.
The PURC is very mindful of the current economic circumstances, but notes that the potential for outages (dumsor) is high and this could have strong adverse impact on citizens and businesses.
This has to be avoided. The PURC therefore sought to balance prevention of extended power outages and its adverse implications on jobs and livelihoods, while minimising the impact of rate increases on consumers. The Commission will continue to monitor quality of service to ensure consumers get value for money.
The Commission therefore decided, after extensive deliberations and analysis, to increase the average end-user tariff for electricity by 18.36% across board for all customer groups.Source:Peacefonline.com
GOVERNMENT MUST COME CLEAN ON THE CURRENT LOAD SHEDDING.
The Minority in Parliament has observed with serious concern, the recent persistent power outages (Dumsor) being witnessed across the country, particularly during peak hours.
This appears to be worsening with many parts of the country experiencing long hours of darkness without prior notice to consumers.
While most Ghanaians have been witnessing intermittent power outages, others have been experiencing low currents and occasional high voltage leading to damages of their electrical gadgets and equipment in some cases.
It is a well known fact especially, amongst energy sector players that the current outages the country is experiencing is due to gas shortages coupled with serious challenges with the procurement of alternative fuels due the precarious financial state of the Energy sector SOEs.
Most of the Energy sector SOEs have continued to witness worsening financial positions since the assumption of office of President Akufo-Addo and Dr Bawumia, despite their administration receiving over 20 billion cedis in ESLA revenues and about 40 billion cedis in petroleum revenues.
More disturbing is the deliberate decision by Government communicators and Energy Sector SOEs to keep mute whilst the ordinary Ghanaian is made to experience this avoidable state of load shedding.
We therefore call on Government and responsible government agencies to come clean on the current state of power outages as a matter of urgency and provide a schedule if need be to enable the ordinary consumer and industry to plan and avoid damages of their electrical equipment.
Thank you.
John Abdulai Jinapor-(MP)
(Ranking Member, Mines and Energy Committee).
THE EXECUTIVE Director of the Environmental Protection Agency (EPA) Dr. Henry Kwabena Kokofu has appealed to the National Chief Imam to lead the crusade for a clean and responsible environmental activities in the country.
Dr. Kwabena Kokofu noted that the country faces several environmental challenges as a result of both internal and external factors which threaten the lives of its people.
He was therefore of the view that the involvement of civil society groups, more especially the venerable Office of the National Chief Imam will go a long way to assist in shaping the minds and attitudes of Ghanaians in becoming environmentally conscious.
The EPA Executive Director made the appeal when he led a delegation made up of directors of the agency to pay a courtesy call on the National Chief Imam last Friday.
He noted that environmental degradation as a result of human activities is a source of worry to the country, adding that though government is doing it’s best to address these challenges, it would require the expressed support and commitment from all stakeholders, including the religious community.
The National Chief Imam has meanwhile affirmed his support towards the crusade for environmental safety in the country.
The National Chief Imam made references to the Holy Book, The Qur’an where Allah The Almighty stresses the diverse reasons for creating man and enjoining man to be each other’s keepers.
He noted that every Ghanaian has a collective responsibility to ensure that out environments are safe since our very existence depends on it.
Speaking through his Spokesperson Sheikh Aremeyaw Shaibu,The National Chief Imam noted “I am appealing to every Ghanaian to understand the importance of the environment; that is where we all survive. Collectively owe it to ourselves as a duty to make our environments clean of all poisonous substances that affect our health”
Meanwhile, the EPA Executive Director and his team made a handsome donations of items including 100 bags of rice, 100 cartons of canned fish and 100 cartons of cooking oil.
