Power plant construction has been delayed due to the legal battle

In West Africa, a Ghanaian opposition member of parliament has filed a lawsuit against the ten-year power purchase agreement between Karpowership Ghana Company Ltd, a subsidiary of Turkey-based Karadeniz Holding, and the state-owned Electricity Company of Ghana.

Ghanaian MP Mark Assibey Yeboah is taking legal action through his fellow MP and lawyer, Afenyo Markin at the Supreme Court in Ghana. Yeboah claims the deal was not transparent and did not adhere to the parliamentary laws of the country, the World Bulletin reported.

Adhering to laws

Ghanaian law stipulates that every agreement with an international firm needs to be pre-approved by parliament, which did not happen in this case.

During a parliamentary session Markin said: “The Supreme Court must determine whether or not the agreement between the Electricity Company of Ghana and Karpowership constitutes an international business transaction of which government is a party.”

In breech during a crisis

Despite the country being amidst a power crisis, Markin expressed that any deal needs to follow legal procedure.

Markin said: “The fact that we are going through a power crisis does not mean that government should take advantage and breech the constitution of Ghana.

“Ghanaians want their government to be transparent and Ghanaians want their government to do the right thing in every effort it is making to resolve the power crisis.”

The power purchase agreement

In February, ESI Africa reported that two of Ghana’s port cities of Tema and Takoradi will be welcoming two floating power plants in March from Turkey.

The power plants will have a combined generation capacity of 450MW that will be linked directly to Ghana’s national electricity grid.

Independent power producer Karpowership pre-financed the project at an estimated total cost of $1.2 billion (ZAR11 billion) with each ship costing $600 million (ZAR7 billion).

Additional power extension projects

In earlier reports, the Ghanaian government issued the Electricity Company of Ghana with a $42.90 million (ZAR523 million) loan facility in support of a project to reinforce and extend the electricity distribution system.

The loan offer follows an agreement reached between the government and the African Development Fund for an amount of $42.90 million and a grant of $29.79 million.

Subsequently, there is an on-lending agreement between government and the Electricity Company of Ghana for the cedi equivalent of (Units of Account 28,600,00) $42.90 million to support the expansion drive of ECG, GhanaWeb reported in April.

The key objective of the Electricity Company of Ghana power project is to extend reliable and secure power access to the Ghanaian population by refurbishing its distribution system in addition to installing off-grid power systems in remote locations.

The benefits of the project also extend to curbing the number of power outages, improving overall voltage level from distribution to final user, and reducing the distribution system losses.