The Africa Centre for Energy Policy (ACEP) has called for a comprehensive examination of Ghana's electricity procurement processes. This demand follows a US federal jury's conviction of a former Goldman Sachs banker, Asante Kwaku Berko, for a bribery scheme. The scheme was connected to securing approvals for a power project involving the Turkish energy company AKSA Enerji.
Benjamin Boakye, ACEP's Executive Director, asserts that the conviction should prompt Ghanaian authorities to scrutinize underlying power agreements. He argues that the central problem is not the 'take-or-pay' clauses in contracts. Instead, it is Ghana's consistent failure to plan sufficiently to use the generation capacity it contracts.
This situation fits into a broader narrative of Ghana's energy sector challenges. The country has accumulated significant long-term generation commitments, many of which have become financially unsustainable. The government is already seeking concessions from various Independent Power Producers (IPPs) due to these mounting obligations. This current controversy offers a critical opportunity to revisit how these commitments were created.
Mr. Boakye states, "Any sensible approach requires that you pause and investigate." He believes the concerns surrounding power-sector procurement justify reopening commercial arrangements. He urges the Ministry of Energy, the Attorney-General, and the Office of the Special Prosecutor to interrogate these agreements. The goal is to establish whether they were properly negotiated and structured, ensuring Ghana received commensurate value for the liabilities it accepted.
The conviction of Mr. Berko, a former Managing Director of Tema Oil Refinery, highlights potential weaknesses in Ghana's procurement environment. Mr. Boakye questions whether contracts emerging from such an environment delivered commercially defensible terms for Ghana. He also asks if similar weaknesses might exist across the country's generation portfolio.
ACEP has consistently questioned the terms and procurement processes of some IPP agreements for years. Mr. Boakye emphasizes that the current controversy provides a rare chance to review the broader architecture of Ghana's power sector. This includes examining what the state agreed to buy, the actual cost of generating assets, and how prices and contractual obligations were determined.
The 'take-or-pay' structure itself is not inherently problematic, according to Mr. Boakye. This type of contract provides investors with revenue certainty, crucial for financing capital-intensive power plants. Investors commit hundreds of millions of dollars upfront, requiring assurance that their assets will generate revenue over time. A 'take-or-pay' clause ensures the purchaser pays for agreed capacity, even if not fully consumed.
The issue arises when Ghana contracts this capacity without ensuring its electricity system can economically absorb it. Electricity generation is merely the first step. The power must then be evacuated through transmission infrastructure, delivered via distribution networks, and consumed by customers. It must also be properly metered, billed, and converted into cash to flow back through the value chain. Ghana's inability to manage this entire chain effectively leads to paying for unused capacity, creating significant financial strain.
This situation underscores the urgent need for a thorough review. It ensures that future power contracts are not only transparent but also align with Ghana's actual energy needs and infrastructure capabilities. The outcome of such an investigation could significantly impact Ghana's public finances and its energy security for years to come.