The government’s negotiation with Karpower Ghana, an Independent Power Producer in Ghana, to sign onto the IPP Debt Restructuring exercise is at risk of hitting the rocks over a strong disagreement. The negotiations have currently ended up in a deadlock as the two parties fail to find a common ground.
Finance Minister, Dr. Mohammed Amin Adam reveals that Karpower is demanding an amount of $70 million from the government under “bizarre” circumstances or they call off their guarantee. According to the Minister, the demand for $70 million is outside the initial terms of the agreement which the government is not ready to oblige.
Due to the failure of the government to comply with their demand, Karpower, the minister says has threatened to call off their guarantee and shut down their power plant, an action the minister describes as acting in “bad faith.”
This stalemate has resulted in the breakdown of the negotiations between the two parties with the Minister insisting on the “right things to be done.”
“Ghana is not a street country sitting by the roadside that you are negotiating and you come and say pay me this before I go ahead. That’s not the way to negotiate,” the Minister said.
However, he noted that the government is still open to engaging with Karpower in the interest of the two parties. He further indicated that despite the challenges encountered, he gave the assurance that the government will continue to work hard to ensure that the power supply to Ghanaians is not affected by the developments.
“If we recall, Karpower called their guarantee. But they also called the guarantee under circumstances we did not agree. Karpower will ask that we should pay them 70 million dollars outside the agreement and if we don’t they call off the guarantee. I said I’m not going to pay you 70 million dollars outside the agreement. We have to negotiate and sign before I will make any payment,” Amin Adam explained.
He maintained that “unless they reversed that action, which was action in bad faith, there was no way we could make progress. So we are waiting for them. But while they are behaving the way they behaved, we continue to do everything possible to ensure that we do not have interruption as far as power supply is concerned. We are open to continuing engagement with Karpower so that we can resolve our differences.”
The development, despite the minister’s assurances to ensure a constant power supply, has far-reaching consequences for Ghanaians. Already some parts of the country are experiencing intermittent power outages.
This means that should Karpower shut down its power plant, the situation would be worsened. Businesses and individuals who depend on the power supply for their daily activities will face severe distress.
