Government, through the Volta River Authority (VRA), is expected within five (5) years to pay in full the US$510 million, being the contract sum for the power deal it signed with Africa Middle East Resources Investment (AMERI) Energy, a payment plan on the controversial contract has revealed.
This means Ghana will pay US$102 million total payment per year, implying equipment payment of US$850,000 per month per unit.
The deal covers 10 gas power turbines with generation capacity of 250MW.
However, the guaranteed combined output of the turbines is 230MW whiles output of each unit is 23MW (guaranteed).
Government’s deal with AMERI for the supply of 10 power turbines on a Build Own Operate and Transfer, (BOOT) basis is now engrossed in a scandal, following a Norwegian newspaper publication claiming the agreement was fishy.
The deal has since come under public scrutiny whiles the peoples’ representatives in Ghana’s Parliament have been criticised for failing to do a proper due diligence before approving the agreement in April this year.
Details of the agreement also show that the cost of gas (fuel) required to power the turbines will be solely borne by Ghana as well as demineralized water for the barge.
This, in addition to other exceptions AMERI Energy, will enjoy including a tax holiday as captured under Clause10 (d)(i, ii, and iii) of the contract entitled; “REQUIRED PAYMENTS.”
“The Contract Price does not include any Local Taxes and AMERI ENERGY will have received Tax Exemption;
The Contract Price does not include any costs with respect to fuel, which will be provided by the GoG in accordance with the Minimum Fuel Specification and the Minimum Pressure Specifications.’
The Contract Price does not include any costs with respect to demineralized water, which will be provided by GoG in accordance with the Operating Specifications; and
There will be no material changes to industry standards and the Laws of the Republic of Ghana which were in effect of the date of AMERI ENERGY’s proposal to the GoG with respect to the AMERI ENERGY Equipment and the AMERI ENERGY Services. As further described in Section 14,” it read in part.
Energy Think Tank, Africa Centre for Energy Policy (ACEP), has described the agreement as a “badly negotiated power deal” arguing that Ghana could have gotten a better deal.
Below the full contract on how Government of Ghana (GoG) agreed to pay AMERI Energy the US$510million over the next five next years under Clause 10 of the entire agreement titled “REQUIRED PAYMENTS.”
(a) During the Term, in consideration of the installation, operation and maintenance of the AMERI ENERGY Equipment and the provision of the AMERI ENERGY SERVICES, the GoG shall be obligated to make payments to AMERI ENERGY on a monthly basis as required under this Agreement (the “Required Payments), calculated at the rates specified in Section 10(b) and 10(c) of this Agreement, and in accordance with the adjustments and other provisions of Annex C of this Agreement.
(b) Subject to any adjustments to be made in accordance with the provisions of this Agreement (including Annex C to this Agreement), the monthly Required Payment shall be calculated as the amount equal to per Turbine per month, which has equal to the amount as stipulated in Annex G. The Parties acknowledge and agree that the aggregate amount of the Required Payments for the Term (assuming no Preliminary Commercial Operation) shall be the amount as stipulated in Annex G (“Contract Price), which is based on the terms set forth in Section 10(c).
(c) Subject to any adjustments to be made in accordance with the provisions of this Agreement (including Annex C to this Agreement), the Variable Amount for each calendar month shall be an amount equal to the product of: (i) the number of Fired Hours of each Turbine, and (ii) US$ the amount as stipulated in Annex G per fired hour.
(d) The formulation and acceptance of the Contract Price is based on the following:
(i) The Contract Price does not include any Local Taxes and AMERI ENERGY will have received Tax Exemption;
(ii) The Contract Price does not include any costs with respect to fuel, which will be provided by the GoG in accordance with the Minimum Fuel Specification and the Minimum Pressure Specifications’
(iii) The Contract Price does not include any costs with respect to demineralized water, which will be provided by the GoG in accordance with the Operating Specifications; and
(iv) There will be no material changes to industry standards and the Laws of the Republic of Ghana which were in effect of the date of AMERI ENERGY’s proposal to the GoG with respect to the AMERI ENERGY Equipment and the AMERI ENERGY Services. As further described in Section 14; and
(e) If the AMERI ENERGY Equipment is imported under a temporary import duty exemption and the GoG requires or causes the AMERI ENERGY Equipment to remain in the Republic of Ghana past the temporary import duty exemption expiration, then the GoG will be responsible for paying the GoG with an invoice for the estimated amount of such additional charges and the GoG shall pay AMERI ENERGY such estimated amount within ten (10) days of receipt of AMERI ENERGY’s invoice. Once the additional fees, duties and/or penalties are finally determined, AMERI ENERGY shall provide the GoG with evidence of the final charges and if the final charges are in excess of the estimated amount paid by the GoG, Ameri Energy shall refund the excess payment to the GoG. In the event the final charges are greater than the estimated amount paid by the GoG, the GoG shall pay AMERI ENERGY the difference between the estimated amount paid by the GoG and the actual amount of such additional charges.
(f) The daily rate for the provision of the AMERI ENERGY Services for any partial month after the Term shall be: 1/30th of the monthly Required Payment (the “Daily Rate).
Annex G of the entire agreement between the Government of Ghana and AMERI ENERGY Services consists of Pricing, Contract Price, and Monthly Required Payments.
Equipment Payment: US$850,000 per month per unit
Number of Units to be deployed: 10
Output of each unit (site): 23MW
Guaranteed Output: 230MW
Guaranteed availability: 90%
Total Payment per year: US$102million
Variable charge per year: US$0.005/kWh (US$16.6million per year)
Applicable Tariff (Year 1-Year 5) US Cents 14.5918/kWh
Applicable Tariff (Year 6-Year 20) US Cents 10.4149/kWh
This means Ghana will pay US$102 million total payment per year, implying equipment payment of US$850,000 per month per unit.
The deal covers 10 gas power turbines with generation capacity of 250MW.
However, the guaranteed combined output of the turbines is 230MW whiles output of each unit is 23MW (guaranteed).
Government’s deal with AMERI for the supply of 10 power turbines on a Build Own Operate and Transfer, (BOOT) basis is now engrossed in a scandal, following a Norwegian newspaper publication claiming the agreement was fishy.
The deal has since come under public scrutiny whiles the peoples’ representatives in Ghana’s Parliament have been criticised for failing to do a proper due diligence before approving the agreement in April this year.
Details of the agreement also show that the cost of gas (fuel) required to power the turbines will be solely borne by Ghana as well as demineralized water for the barge.
This, in addition to other exceptions AMERI Energy, will enjoy including a tax holiday as captured under Clause10 (d)(i, ii, and iii) of the contract entitled; “REQUIRED PAYMENTS.”
“The Contract Price does not include any Local Taxes and AMERI ENERGY will have received Tax Exemption;
The Contract Price does not include any costs with respect to fuel, which will be provided by the GoG in accordance with the Minimum Fuel Specification and the Minimum Pressure Specifications.’
The Contract Price does not include any costs with respect to demineralized water, which will be provided by GoG in accordance with the Operating Specifications; and
There will be no material changes to industry standards and the Laws of the Republic of Ghana which were in effect of the date of AMERI ENERGY’s proposal to the GoG with respect to the AMERI ENERGY Equipment and the AMERI ENERGY Services. As further described in Section 14,” it read in part.
Energy Think Tank, Africa Centre for Energy Policy (ACEP), has described the agreement as a “badly negotiated power deal” arguing that Ghana could have gotten a better deal.
Below the full contract on how Government of Ghana (GoG) agreed to pay AMERI Energy the US$510million over the next five next years under Clause 10 of the entire agreement titled “REQUIRED PAYMENTS.”
(a) During the Term, in consideration of the installation, operation and maintenance of the AMERI ENERGY Equipment and the provision of the AMERI ENERGY SERVICES, the GoG shall be obligated to make payments to AMERI ENERGY on a monthly basis as required under this Agreement (the “Required Payments), calculated at the rates specified in Section 10(b) and 10(c) of this Agreement, and in accordance with the adjustments and other provisions of Annex C of this Agreement.
(b) Subject to any adjustments to be made in accordance with the provisions of this Agreement (including Annex C to this Agreement), the monthly Required Payment shall be calculated as the amount equal to per Turbine per month, which has equal to the amount as stipulated in Annex G. The Parties acknowledge and agree that the aggregate amount of the Required Payments for the Term (assuming no Preliminary Commercial Operation) shall be the amount as stipulated in Annex G (“Contract Price), which is based on the terms set forth in Section 10(c).
(c) Subject to any adjustments to be made in accordance with the provisions of this Agreement (including Annex C to this Agreement), the Variable Amount for each calendar month shall be an amount equal to the product of: (i) the number of Fired Hours of each Turbine, and (ii) US$ the amount as stipulated in Annex G per fired hour.
(d) The formulation and acceptance of the Contract Price is based on the following:
(i) The Contract Price does not include any Local Taxes and AMERI ENERGY will have received Tax Exemption;
(ii) The Contract Price does not include any costs with respect to fuel, which will be provided by the GoG in accordance with the Minimum Fuel Specification and the Minimum Pressure Specifications’
(iii) The Contract Price does not include any costs with respect to demineralized water, which will be provided by the GoG in accordance with the Operating Specifications; and
(iv) There will be no material changes to industry standards and the Laws of the Republic of Ghana which were in effect of the date of AMERI ENERGY’s proposal to the GoG with respect to the AMERI ENERGY Equipment and the AMERI ENERGY Services. As further described in Section 14; and
(e) If the AMERI ENERGY Equipment is imported under a temporary import duty exemption and the GoG requires or causes the AMERI ENERGY Equipment to remain in the Republic of Ghana past the temporary import duty exemption expiration, then the GoG will be responsible for paying the GoG with an invoice for the estimated amount of such additional charges and the GoG shall pay AMERI ENERGY such estimated amount within ten (10) days of receipt of AMERI ENERGY’s invoice. Once the additional fees, duties and/or penalties are finally determined, AMERI ENERGY shall provide the GoG with evidence of the final charges and if the final charges are in excess of the estimated amount paid by the GoG, Ameri Energy shall refund the excess payment to the GoG. In the event the final charges are greater than the estimated amount paid by the GoG, the GoG shall pay AMERI ENERGY the difference between the estimated amount paid by the GoG and the actual amount of such additional charges.
(f) The daily rate for the provision of the AMERI ENERGY Services for any partial month after the Term shall be: 1/30th of the monthly Required Payment (the “Daily Rate).
Annex G of the entire agreement between the Government of Ghana and AMERI ENERGY Services consists of Pricing, Contract Price, and Monthly Required Payments.
Equipment Payment: US$850,000 per month per unit
Number of Units to be deployed: 10
Output of each unit (site): 23MW
Guaranteed Output: 230MW
Guaranteed availability: 90%
Total Payment per year: US$102million
Variable charge per year: US$0.005/kWh (US$16.6million per year)
Applicable Tariff (Year 1-Year 5) US Cents 14.5918/kWh
Applicable Tariff (Year 6-Year 20) US Cents 10.4149/kWh
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