Energy Minister John Peter Amewu has said former President John Mahama signed bad contracts in the energy sector and that has resulted in the country paying more for power that is not being used.
He revealed that government is paying an amount of $500million yearly for excess power.
The minister further revealed that Ghana is at the moment using less than 40% of the contracted ‘Take or Pay’ agreements.
Speaking at the Nation Building Updates in Accra, Mr Amewu said “The Mahama led administration signed so many contracts such that we are now using less than 40% of the contracted Take or Pay agreements.
“We currently pay about 500M USD a year as excess capacity from Take or Pay agreements.”
He further revealed that the present government has taken a number of initiatives to ensure uninterrupted power supply to homes and industry.
He said “We have reduced and renegotiate existing contracts to reduce the burden on the economy. Eg. Quantum gas projects, Takoradi LNG, AMERI, CENIT IT; Place complete moratorium on PPA & PCOA; Renegotiated domestic gas price from $8.8 per MMBTU to $6.08 per MMBTU;
“Restored the price of Jubilee gas to zero from $3 per MMBTU; Increased output of jubilee gas from 70mmsfcd to 125mmsfcd (to recover more oil).”
He added “There has also been reduction of taxes: Rural Electrification Levy was reduced from 5% to 3%; Street Lighting Levy was reduced from 5% to 2%; reclassification of consumer categories to protect lifeline and strategic; industrial customers.”