Disclose PPAs agreements for sustainable power sector

Independent Power Producers have threatened to shut down

Mr Crispin Bobio, Energy Analyst, Baobab Energy Consult, says Ghana can build a low-cost, competitive and sustainable power sector if government discloses future Power Purchasing Agreements (PPAs).

He said transparency of PPAs would level the playing field for all firms and reduce governance and investment risks and build public confidence about government’s management of the sector.

Mr Bobio made the suggestions on Wednesday at the Forum on Ghana and PPAs Transparency organised by the Institute of Economic Affairs(IEA) in Accra.

The Forum was on the theme: “PPA Transparency can help build Ghana’s Power Sector and Protect it’s finances.”

Mr Bobio in a presentation, said one of the barriers to transparency of PPAs had to do with politics in government cycles.

He said new administrations often revealed previous flaws, but remained silent about current issues, leaving citizens unaware of the state of the power sector.

Mr Bobio said the non-disclosure of information by government regarding sector failures, such as erratic power supply or a nationwide electricity crisis, in order to avoid unfavourable public opinion.

He said current laws provided no regulation or requirement for public disclosure of PPAs and transparency, especially in contract negotiations which had been overlooked, leaving the public under the impression that contracts were strictly confidential.

Mr Bobio said another barrier had to do with commercial confidentiality, in that, some legitimate rationales existed for contract details to remain private, especially during the negotiation process.

Mr Samuel Atta Akyea, Chairperson, Mines and Energy Committee, advised that even in emergency situations, it was best for government to apply a competitive bidding approach to arrive at the best price and quality service to prevent serious implications for Ghana’s economy.

He suggested that a standardised legal regime should be set out to regulate PPAs so that contracts did not become government sensitive.

Mr Akyea said in this way, contracts awarded would strictly be guided by a legal framework and prevent the situation of rush deals which could generate dire consequences later on.

Mr Elikplim Kwabla Apetorgbor, Chief Executive Officer (CEO), Chamber of Independent Power Producers (IPPs), said competitive bidding during the procurement process promoted transparency, increased public confidence and reduced cost.

He said government must create the enabling platform for regulators and agencies to discharge their roles professionally and objectively without interference.

Mr Apetorgbor said to further promote transparency, the Ministry of Energy should provide the supervisory role, policy guidance and direction with respect to the power business strategy of government.

He said the Ministry should also assist relevant agencies assigned to function openly and effectively.

Mr Apetorgbor said the Energy Commission, being the technical regulator should set the most cost effective but tested technical standards to sustain viability and sustainability of power projects.

He said the Commission should also be involved in the physical and technical audit of the various equipment, machines, components and parts of the power plants before and after construction.

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