Is AMERI really making any Money?

There have been various articles about AMERI making an extra US$ 150 million from the power deal. This had raised serious eye-brows amongst the government corridors and brought serious attention from international and local news agencies, on allegations of fraud and corruption.

It has been learnt through credible sources that the AMERI deal, signed in early February 2015, was financed by a consortium of international lenders, whereby, Members of the Royal Family in Dubai backed this Project to achieve financial close and its implementation in record time-frame. The Project was operational within four (4) months of the Government achieving its required conditions as stipulated in the Contract.

AMERI being a Developer (and not an Agent) based out of Dubai, having the backing of the Royal Family negotiated a power deal with the Government of Ghana to sell power at one of the cheapest tariffs available to the people in Ghana (certified by PWC – Big Four Accounting Firm) with 1/10th of the amount committed by the Government
of Ghana as security for its investment. According to sources, AMERI themselves submitted copies of the internationally bankable EPC Contracts and O&M Agreements with its partners METKA – the largest EPC Contractor based out of Greece. Additionally, claims made by think tanks, pertaining to the Government having paid AMERI up-front US$510 million have created mass confusion amongt the public.

The Contract, which is currently in force, has a repayment period of five (5) years, after which, the Government would have re-paid, only if, AMERI continues to produce electricity at the required rate.

According to the Contract, the Government of Ghana (GoG) has not paid a single dollar upfront to AMERI to set-up this fast track 250 MW power project in Ghana. The perception given to the public that AMERI has received USD 510 million dollars is completely wrong. The cost of Project entailed, inter alia, the financing costs, management costs, the costs for procuring insurances and re-insurances with nominal return on investment to the Project as per Government Policy for the five (5) year period.

According to our sources, since there were huge gaps in the security being offered by the Government and the cost of financing the entire Project, including its Operations and Maintenance, the Royal Family in Dubai had committed personally to the Project in order to deliver it, on the request of the Government of Ghana, in a record time-frame. The Contract was later ratified by the Parliament, which is now under discussion of being revoked on no fault of the operator.

Any attempt made by the Government to rescind/revoke such contract would have serious consequences for Ghana. This will obligate the Government Ghana to immediately pay to AMERI the entire outstanding amount in hundreds of millions of dollars mentioned in the Contract.

The Government should be careful, before taking any measures sincerevocation of Parliamentary approvals in Ghana may also trigger Government defaults and the Government may still be liable to pay the required amounts, as per the Contract. According to sources, lenders who have contributed to lend towards this AMERI Project, have shown
serious reservations on the Government effort to renegotiate a commercial deal, which was ratified by the Parliament. This will further fuel controversies amongst the power circles and may put Ghana on the radar of countries that have failed to honor their financial commitments. This will block new investment in Ghana and aggravate the already prevalent power crisis.

In the recent stream of events, where KT Hammonds who backed up the deal in the previous regime has suddenly changed his stance after having comprised his position in power in the newly elected government. He is being forced to misrepresent on various grounds where the entire motion is extremely misleading. His claims of any misrepresentation at the time when the Contract went for Parliamentary ratification are completely malicious and false. According to our sources, the EPC Contracts were signed in August 2015, and the parliamentary approval was completed in March 2015. The details of the Contracts were submitted by the Developer to ensure transparency.
Hence no concealment of facts may have happened at that time. Hammonds claims may put the Government in a worse situation where Government may have to pay AMERI for an enforceable contract.

Whether or not the AMERI deal is riddled with the symptoms of corruption or mis-administration it seems obvious that there is a valid contract between the Government of Ghana which is providing cheap and the most efficient electricity to the people in Ghana.

Looking over the past months, it seems obvious that the newly elected Government has reacted strongly and wishes to deliver to its people. However, the propaganda in the media seems not to escape, but to create ripples and dig old holes. it also seems true that now since the media have played such a pivotal role in highlighting a false perception by paving a deep hole that the only way out the Government sees of this self-created farcical lie would be to create an
impression for the Government to be pushed to abrogate this deal.

By Dr Eugene Addo Fianko (Consultant- European Energy Centre)

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