Government is to resume ownership of the 250-megawatt (MW) Africa and Middle East Resource Investment (AMERI) thermal power plant from February 1, 2021 per the terms of the deal.
The Dubai based firm arrived in the country in October 2015 to assist in resolving the power crisis at the time. The deal was signed by the government at a total cost of US$510 million on Build, Own, Operate and Transfer (BOOT) basis.
Based on the BOOT terms, the government through the Volta River Authority (VRA) will commence the ownership, operation and maintenance mandate by February 1, 2021. Owing the plant, comes with many benefits to the state. It will lead to cheaper thermal power because there will be no capacity charges, increase the country’s power portfolio and VRA’s capacity to tap into the West African market, among others.
Read More:
Conditions for take over
Although AMERI wrote in September 2020 to inform government of its intention to handover the plant by the date stated in the contract, B&FT sources say the latter has yet to take the necessary steps.
For instance, it is understood that the government has yet to conduct a technical audit to ascertain the integrity of the plant. There has also not been any form of training of VRA staff to man the facility and a memorandum of understanding or roadmap on how to settle an outstanding balance of US$32 million due the Dubai based energy firm, as of beginning of January 2021.
Additionally, AMERI wants government to make full payment for January before the state assumes ownership, but this has not been done yet. “From IES checks, government has been slow. We have not seen better preparation from government,” says Nana Amoasi VII, Executive Director of Institute for Energy Security (IES), an energy think-tank.
Possibility of an extension
With less than three days to the deadline and with all these conditions yet to be fulfilled by the state, it is increasingly likely that the deal may have to be extended, possibly by a few months.
Nana Amoasi VII believes that it will not be prudent for the state to assume ownership of the plant without having to technically verify it and that as it stands he can only see two possibilities: either AMERI retains ownership of the plant while the VRA assumes maintenance and operational responsibilities, or the deal would have to be extended until all issues are resolved.
The lukewarm attitude points to a possible extension because a technical audit to ascertain the plant’s integrity is yet to be conducted. VRA staff are yet to be trained and a roadmap on how to pay the outstanding balance has not been done,” he added.
AMERI, to him, has so far shown willingness to handover the facility and that the firm may not have an issue doing so if the government is able to reach a memorandum of understanding on how the US$32 million debt will be paid.
It would be recalled that President Nana Addo Dankwa Akufo-Addo in 2018 sacked former Energy Minister, Boakye Agyarko, due to his handling of the AMERI deal. The minister had sought to extend the deal by another 15 years, but faced resistance from civil society organisations and the media, leading to his dismissal.
Technical details
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 5 years to provide a guaranteed output of 230 MW. The cost of each of the 10 units of the Plant was US$850,000 per month, totaling US$102 million per year, and US$510 million for 5 years.
The payment security arrangement for the AMERI plant is a standby letter-of-credit (LC) for US$51 million over a coverage period of six months. AMERI has not enjoyed Government Consent and Support Agreements (GCSA) GCSA backing, as is the case with other IPP plants, which in some instances, had no obligation to hand-over the plant to the government at the expiration of the contract period. The AMERI Agreement was structure to see the 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 Cent per kilowatt-hour (USc/kWh). The levelized tariff for AMERI of USc11.46/kWh is the lowest compared to the tariffs for other 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) as its fuel.
Source: B&FT
