Energy sector analysts want the government to be firm in adopting competitive bidding processes in power purchase agreements (PPAs) in order to regain financial guarantee support from the World Bank.
The Director of Research at the Institute of Energy and Climate Change Policy, Dr. Philip Adom warns of unfavourable developments in the energy sector should the World Bank deny its support entirely.
“The World Bank suspending the support does not mean they have out rightly decided to withdraw the support. Probably they are observing this current government and the reviews it conducts and how they are going to iron out the issues,” he observed.
The Analyst further opined, “Obviously these are monies that are coming into the energy sector so if there should be any withdrawal, it’s going to affect our energy sector.”
The Country Director for the World Bank for Ghana, Liberia and Sierra Leone, Henry Kerali told Citi Business News the Bank withdrew its guarantees for PPAs in 2016 upon realizing that the country had signed more than agreements required.
At the time, the government had signed unto 12 power purchase agreements.
With the coming in of the new government,the country is said to have signed agreements with about 40 power producers which has led to excess supply over demand.
The move has since raised a lot of concerns among industry players who believe Ghana’s excess power should have been sold out to neighbouring countries but for the relative high cost compared to others within the sub-region.
But Dr. Philip Adom believes Ghana could renew its confidence should government open up the bidding processes.
The World Bank should rescind the decision if we are able to do our homework well and make sure that those PPAs that we have engaged in that actually did not give value for money, we make sure we try to do away with such issues and ensure that there is sanity in the system.”