Prime News Ghana

Info. Min. dispels assertion that renegotiating take-or-pay deals will result in judgment debts

By Mutala Yakubu
Minister for Information Kojo Oppong-Nkrumah
Minister for Information Kojo Oppong-Nkrumah
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Minister for Information Kojo Oppong-Nkrumah has moved to dispel assertions that government's decision to renegotiate some of the current power purchase agreements will result in judgement debts.

His comments come on the back of assertions by some experts after Finance Minister Ken Ofori Atta said the take or pay clause is having a toll on the nation’s finances which is impacting on revenue.

“At the heart of these challenges are the obnoxious take-or-pay contracts signed by the NDC, which obligate us to pay for capacity we do not need,” Mr Ofori-Atta indicated while presenting the mid-year budget review to Parliament.

He said the country was paying over GH¢2.5 billion annually for some 2,300MW in installed capacity which the country does not consume.

“We shall from August 1st 2019, with the support of Parliament, make take-or-pay contracts a beast of the past,” he stressed.

According to the experts, government risks being slapped with judgment debts if producers of fuel and power fail to comply with terms of proposals to cancel take or pay clauses in the energy sector.

However, the Minister for Information says the government is cautiously working to convert the take-or-pay agreements to take-and-pay with some Independent Power Producers (IPPs) in a way that will prevent possible legal issues like a breach of contract.

“Not that we intend to force it down their [IPPs’] throats. We can’t do that. The idea is also to explain to them where the sovereign tends to go, where the red line is, so we begin to work with them,” he said Tuesday evening on MultiTV’s current affairs programme, PM Express.

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