A former energy minister, Dr Kwabena Donkor, has hit back at the World Bank Country Director, Pierre Frank Laporte, for his comments regarding power agreements signed under the NDC government.
Mr Pierre Frank Laporte accused the Mahama-led government of contributing to the current economic difficulties due to the Power Purchase Agreements (PPAs) signed under a take-or-pay agreement, which committed Ghana to pay for excess energy it did not need.
However, the former power minister of the Mahama administration, under whom some of the power plant agreements were signed, says Mr Laporte’s assertions are factually inaccurate.
“I am just pointing out that he did not do proper research. Either he did not do proper research, or as usual with the World Bank, a government in power does no wrong. It is only when the government exits that the World Bank comes out with all sorts of misgivings about their performance,” he told journalists.
According to the Pru East constituency legislator, the challenges confronting the PPAs are a result of the free fall of the cedi, not the alleged mismanagement, as Mr Laporte claims.
“The Dollar-Cedi exchange rate was GH¢4.14, but as of June 4, the exchange rate was GH¢11.193 to the Dollar. Remember that power purchasing agreements are signed and paid in dollars. ECG’s collection is in cedi, and therefore, when we mismanage the economy, it impacts our ability to pay for the power we generate. So I would have expected the World Bank country director to lay more emphasis on managing the economy to attain a stable exchange rate. The exchange rate during this period has tripled, and thus, the PPA. The deteriorating exchange rate has rather affected the tariff of the PPA.
“The World Bank, the IMF, and the Ministry of Finance have failed to manage an efficient economy and run an economy that creates confidence to warrant a stable exchange rate, so I will really want the World Bank country director to come again than to go around throwing partisan punches,” Dr Kwabena Donkor added.
The World Bank (WB) Country Director to Ghana, Pierre Frank Laporte, stated that Ghana’s energy sector debt is a key contributor to the country’s debt woes.
The country director indicated that his outfit had identified certain factors driving the country’s debt situation.
According to him, the world bank has identified the energy sector as one of Ghana’s debt distress factors.
Mr Laporte explained that the shortfall in the sector is marked by the tariff systems and management issues coupled with expensive power purchases by the state, in addition to the transmission losses, which were the major problems in the energy sector driving Ghana’s debts.
He said the misalliance between the production cost of the Independent Power Producers (IPPs) vis-à-vis how much consumers paid led to an upsurge of debts since the government could not make financial commitments to them (IPPs).
Mr Laporte also said the Power Purchasing Agreements (PPAs) the government had signed were expensive. In addition to the exorbitant power purchases, the country was paying for energy it does not use due to the “take or pay contracts.”