An energy expert, Kweku Andoh Awotwi has said government’s efforts at financial re-engineering of the power sector is in the right direction.

He said it is commendable for government to have a mutually beneficial Power Purchase Agreement (PPA) with the Independent Power Producers (IPPs) and commit itself to pay them accordingly over the agreed number of years.

“If the financial re-engineering is intended to reduce the obligation related to cash outflow on the government and the ECG and be able to pay the IPPs over 20 to 25 years, whatever the case may be, that’s a positive,” he stated.

The Board Chairman of the Multimedia Group was speaking on Accra-based Asaase Radio on Sunday, May 16.

The Energy Minister, Dr Matthew Opoku Prempeh, has described all 40 Power Purchasing Agreements (PPAs) signed under the Mahama administration amid the power crisis between 2013 and 2016 as costly.

At a press conference on Sunday, the Minister argued that these “costly” PPAs increased tariffs on power by over 200 per cent.

The Manhyia MP revealed that three PPAs had been deferred under a renegotiated Take and Pay arrangement. This, according to him, saves the country $1.4 billion each year.

Commenting on the sector and current happenings, the former VRA Chief Executive Officer also indicated that it is appropriate that the financial re-engineering is being done in tandem with improvements in infrastructure as is currently being done by ECG with support from the Millennium Challenge Compact (MCC).

“We’ve got to make ECG more efficient. And that’s why for some time now, the government was looking to find a private sector partner for ECG.

“Because around the world, many of these operations are privatised, and they are run on much more commercial principles. So we’ve got to make the sector more efficient, we’ve got to find a way to reduce the losses,” he noted.

Mr Awotwi said the MCC’s support for ECG has been very helpful in this regard, “The work they’re doing recently in the substations, outside of Accra that has resulted in these load shedding schedules, is building capacity to move electricity in and out of Accra.

“And if you think of Accra probably taking 40% of the country’s requirement, they are building capacity so that electricity can come in and out easily, and some of the congestion that we’re complaining about will go away.”