…to allow gov’t settle US$92m debt
Government is opting to allow the 250-megawatt (MW) Africa and Middle East Resource Investment (AMERI) deal to run until end of April 2021, Benjamin Boakye, Executive Director of Africa Centre for Energy Policy (ACEP), an energy think-tank, has told the B&FT.
Government through the Volta River Authority (VRA) was to resume ownership of the thermal plant from today, February 1, 2021 when the five-year US$510 million Build, Own, Operate and Transfer (BOOT) agreement expires.
However, according to Mr. Boakye, government is opting for an extension to allow it to defray an outstanding balance of US$92million due AMERI. The amount includes a US$36million debt and US$56million in no cost extension, and it is understood that government wants to use the next three months to settle this amount – in addition to conducting a technical audit to ascertain soundness of the plant.
The extension will however come as an additional liability to the state, as government will have to pay AMERI maintenance and operation fees until it is finally ready to assume ownership. “This could have been avoided,” he lamented, adding that “the process could have been smoother if we did the renegotiation early,” and urging the government to stay focused on fulfilling all terms of the deal so as to avoid another extension.
The Dubai-based firm arrived in the country during October 2015 to assist in resolving the power crisis at the time. The deal was signed by government at a total cost of US$510million on Build, Own, Operate and Transfer (BOOT) basis.
Based on the BOOT terms, government through the Volta River Authority (VRA) will commence the ownership, operation and maintenance mandate by February 1, 2021.
Although AMERI wrote in September of last year to inform government of its intention to hand over the plant by the date stated in the contract, B&FT sources say the latter has yet to take the necessary steps.
The company wants government to commit to a payment roadmap on how to settle the outstanding balance due it before it can hand the plant over to the state – but this has not been agreed. Additionally, AMERI wants government to make full payment for January before the state assumes ownership, but this has not been done yet.
AMERI delivered the plant by installing 10 new GE TM 2500+ aero derivative Gas Turbines and all related equipment; including the provision of certain services related to the operation and maintenance of the Plant for five years to provide a guaranteed output of 230 MW. The cost of each of the Plant’s 10 units was US$850,000 per month, totalling US$102million per year and US$510million for 5 years.
The payment security arrangement for the AMERI plant is a standby letter-of-credit (LC) for US$51million over a coverage period of six months. AMERI has not enjoyed Government Consent and Support Agreements (GCSA) backing, as is the case with other IPP plants – which in some instances had no obligation to hand over the plant to government upon expiration of the contract period. The AMERI Agreement was structured to see government/VRA owning the plant after the five-year contract period.
In comparison with other IPP thermal plants installed in the country, AMERI offers the lowest installed cost per kilowatt-hour (Kw); offering a composite generation tariff of roughly 14.59 US cents per kilowatt-hour (USc/kWh). The levelised tariff for AMERI of USc11.46/kWh is the lowest compared to tariffs for similar thermal plants.
The AMERI plant, installed at the Abode Thermal Power Enclave, is hooked to natural gas from the Ghana National Gas Company (Ghana Gas) for its fuel.