ACEP Commends Government For Taking Steps To Undertake Value For Money Analysis Of The Ameri Deal

1.0 INTRODUCTION

The Africa Centre for Energy Policy (ACEP) welcomes the request by His Excellency the President to PWC to undertake a value for money analysis of the AMERI Deal through financial modeling aimed at providing a guide for ensuring value for money in future negotiations on procurement of power. The President announced this during interactions with the media at the Flagstaff House yesterday, Tuesday the 12 January 2016. Whilst we commend the President for this laudable step in unearthing the problems associated with the AMERI deal, we are of the view that the scope of the work should be expanded to cover the Power Purchase Agreement between ECG and KARPOWER, a different arrangement for procuring power into the country. This is especially so because our analyses of the KARPOWER deal with ECG reveals another case of poor diligence. Further review of the deal shows that it is worse than a Build Own Operate and Transfer (BOOT) arrangement under which AMERI was procured. A typical PPA should have been over 20 years to spread the cost and thereby reduce the burden on consumers, unlike the 10- year deal negotiated for the Karpowership (See annex for key elements in the KARPOWER and AMERI deals).

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The Africa Centre for Energy Policy (ACEP) was established in 2010 to contribute to development of alternative and innovative policy interventions through high-quality research, analysis and advocacy in the energy and extractives sector in Africa.

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