The government has explained that its transaction with AMERI to generate 250 megawatts of power is a build, own, operate and transfer (BOOT) agreement but not an outright purchase of generating plants.
A statement signed by the Minister of Power, Dr Kwabena Donkor, last night also stated that the government of Ghana had not made payments to AMERI and would not be making payment for the cost of the equipment.
“Per the agreement with AMERI, the government through the Volta River Authority (VRA) will only make payments to AMERI for power produced and supplied to the VRA just like any other independent power producer (IPP).
“Also, per the agreement, the government was required to provide a standby letter of credit (LC) for an amount of US$51 million, which LC has been raised.
“Ghana will, however, assume eventual ownership of the equipment after five years of production and sale of the power to the VRA,” the statement said in reaction to publications in sections of the local media attributed to VG, a Norwegian newspaper.
It explained that the thrust of the publications was that the Ministry of Power, representing the government, entered into an arrangement to secure a 250 megawatts power plant with a company with dubious background and that the transaction amount of $510million was inflated compared to other options.
The statement said that the publications were false, misleading and gross misrepresentation of facts.
It explained that the quoted price of $220 million in the Norwegian story for outright purchase of similar turbines was exclusive of all other costs such as auxiliaries, balance of plant, civil works, sub-station, installation of equipment, cost of financing, operation and maintenance etc.
“Under the agreement with AMERI Energy, the cost of all these auxiliary works is being borne by AMERI Energy. From the foregoing, it is false to claim that the government of Ghana signed a $510 million agreement for the plant, when it should have been $220 million,” the statement said.
On claims that the manufacturers of the plant, GE, could have been contacted to negotiate a direct purchase, the statement said that an earlier offer from GE Consortium to the VRA for similar equipment on rental basis proved to be far more expensive and was, therefore, rejected by the VRA.
The statement said the government had not entered into any agreement with Umar Farooq Zahoor and that the government had an agreement with AMERI
“The Chairman of AMERI Energy is Sheikh Mohamed AL Maktoum who signed the agreement for his firm. Umar Farooq signed as a witness for him.
“The Bank of Ghana before establishing the Standby LC conducted its own due diligence on AMERI Energy.
“The American firm, JP Morgan also independently conducted its own due diligence before confirming the Standby LC for the project.
“Government of Ghana represented by the Ministry of Power and the Attorney General’s Department also conducted due diligence on AMERI Energy and reviewed strenuously the project agreement before submitting to Parliament.
“Parliament, upon receipt of relevant documentation on the project and the agreement, also scrutinized and reviewed the agreement before approving it at the Committee Level unanimously and later by the House, it explained.
The Ministry of Power, in the statement, assured Ghanaians that it would continue to work assiduously to end the current power sector challenges, adding that in doing so “we expect all stakeholders to commit to the noble path of resolving this national challenge instead of throwing in misleading claims programmed to disrupt and derail its efforts.
“We wish to reiterate that as part of efforts to resolve the current load shedding exercise, the following are underway: 225MW Karpower Barge is ramping up generation to attain the contracted generation capacity.
“The 250MW AMERI Plant is undergoing commissioning. The first unit of the 220MW Kpone Thermal Plant is also undergoing commissioning.
“The 12OMW TICO Steam Expansion has been completed.
“The first part of 120MW of the 360MW Sunon Asogli Plant is near completion,” it added.