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The African Centre for Energy Policy (ACEP) is questioning the rationale behind government’s signing of a 10-year agreement for emergency power badges.

According to the Centre, the 10-year agreement suggests that government lacks confidence in its own plans to solve the power crisis.  

The Centre is also raising questions about value for money, saying the cost of bringing in the badge is too high.

The centre is, therefore, calling for immediate publication of the agreement covering the procurement of the emergency power badges for scrutiny.

Mr Benjamin Boakye, the Director of Operations of ACEP, told The Finder that Ghana has agreed to pay 17 US cents per kilowatt hour for power to be generated by the emergency power badges, which is far higher than the 13 cents government pays Independent Power Producers (IPPs) such as Sunon Asogli.

Sources at the Electricity Company of Ghana (ECG) told The Finder that the power purchase agreement has been signed and negotiations are ongoing with banks to provide the guarantees.   

Mr Boakye noted that information available to ACEP indicates that government has to pay four months’ bill in advance valued between $170m and $200m into an escrow account before generation can start, so that should ECG default in paying for the power generated, the owners can claim their money from the escrow account.

In addition, he said, government has to also pay another $50m for each badge as guarantee, but Minister of Power Dr Kwabena Donkor explained that the $50m is guarantee for some works to be done in Ghanaian waters at the place the badge will dock.

According to Dr Donkor, the badge has to dock at an appropriate place to enable Ghana Grid Company (GRIDCo) receive the power to be generated for onward transmission to customers.

The Power Minister stated that government was working round the clock for financial closure for the badge to be moved to Ghana, but he could not give the specific date the badges will arrive in the country.

But Mr Boakye noted that sole sourcing used for the procurement of the emergency power badges does not offer value for money, and wondered why the procurement was not open to competitive bidding.

According to him, the $200m to be put in an escrow account and guarantee of $50m for each of the emergency power badges could be used to build thermal plant that can generate 200 megawatts power.

Mr Boakye explained that the installed capacity of each of the badges is 225, making the two badges 450.

According to him, the two badges can generate a maximum of 400 megawatts power.