The Ministry of Energy, under the pretext of reducing the cost of electricity to Ghanaians, has presented to Parliament for ratification a novation and amendment of the 2015 “build, operate, own, transfer” (BOOT) agreement with AMERI. This new agreement ostensibly delivers some $405 million of savings to Ghana over the new tenure of the agreement.

It cannot be gainsaid that the Ministry’s objective of reducing the high cost of the project to bring financial relief to all citizens is fantastic. However, the document before Parliament today exacerbates the financial burden that the original BOOT AMERI agreement has placed on Ghanaians. Over the 15-year term of the new arrangement, the new company that is stepping into AMERI’s shoes will bag over $1.2 billion, compared to the $500m-plus that AMERI was being paid in five years. On a discounted basis, the new cost of the project is far higher than the old.

Under the new agreement, Ghana makes absolutely no savings, contrary to the impression created in the Minister’s memo to Parliament. Rather, the consumer ends up paying at least $370m more to the new company over the term of the new agreement.

Status of existing contract

The first year of the contract was fully paid for by the NDC government before it exited power. This translates to $102m, which is the full value of the required payments for the 230MW plant at an availability rating of 90 per cent.

The AMERI company presented an invoice to the tune of $151.66m to the NPP government, covering the period between February 2017 and June 2018. Out of this amount, $69m has been paid by the NPP government, leaving an outstanding balance of $82.66m. An invoice for $8.5m was submitted to the government by July 31 2018. This brought the total outstanding invoiced amount to $91.16m.

It is important to mention that the total settlement to date (under both NDC and NPP governments) is therefore roughly $171m. Under the $510m contract, government has about two and a half years left before it will own the 230MW plant, conditional on the payment of the outstanding $339m.

Agreed settlement terms

The government, in the proposed amendment, commits to pay $39m of the $91.16m outstanding for the executed part of the original AMERI contract, which will bring direct government payments to AMERI to $210m. Mytilineos International Trading Company Ltd, the new company the Ministry proposes to engage to manage the AMERI power plant, has pledged to settle part of the government’s outstanding indebtedness ‒ the sum of $52m ‒ with AMERI.

In exchange, the existing AMERI contract is novated to Mytilineos with amendments for a new tenure of 15 years.
This means that $300m is the liability assumed by Mytilineos in return for the 15-year deal.

For the 15-year deal Mytilineos will be paid at least $75m every year, a total of $1.12bn over the period. This translates into over $800m gains to the company in exchange for assumption of the government’s $300m outstanding liability under the existing AMERI agreement.

Why Parliament must not ratify the agreement

First, the AMERI plant is a low-efficiency, simple-cycle plant and therefore subordinate to its combined-cycle equivalents. Consequently, in an economic merit order dispatch regime with sufficient combined-cycle plant capacity, AMERI is not likely to be dispatched.

According to the Ghana Energy Supply Plan, the capacity utilisation of AMERI will plummet to less than 20 per cent after the year 2019. This implies that the plant will generate little to no electricity beyond 2019. At best, it may provide ancillary and back-up power to the national grid. Any decision to extend the term of the agreement beyond the current five years could potentially result in the government paying for capacity charges with no electricity generated. The total yearly capacity charges in the new agreement are in excess of $75m ($1.12bn over the 15-year term).

It should be noted that ultimately, the government makes absolutely no savings from the new agreement. Rather, over the term of the agreement, the consumer ends up paying an extra $370m or thereabouts to the new company, by way of capacity payments alone. It has been spotted that the Minister’s memo to Parliament failed to recognise in its economic analysis that, the capital recovery charge in the AMERI BOOT agreement drops to nil after year five. The memo wrongfully contemplates the $4.2698/kWh capital recovery charge in all 15 years in its analysis.

The Minister’s memo further, perhaps disingenuously, assigns two different fuel charges to the two agreements under comparison, in favour of the new agreement. It must be emphasised that fuel charges approved by the Public Utilities Regulatory Commission do not discriminate between the two contracting regimes (and the Ministry should know this). These two “errors” have resulted in the misleading impression that savings are being made under the new agreement.

The proposed agreement has bizzarely redesignated the nameplate capacity of the existing AMERI plant (from 230MW) to 250MW, without an actual physical capacity augmentation to the plant. In other words, the same AMERI equipment which was rated 230MW in the BOOT agreement is now rated 250MW under the new agreement. How is that possible? Since all the charges (capital recovery, fixed operations and maintenance or O&M, variable O&M and fuel) are a function of the nameplate capacity of the plant, this “increased” capacity has resulted in increased yearly payments to the new company by a factor of over 1.5. In effect, the new company will receive in excess of $6.7m annually, merely because, perhaps, the capacity of the existing AMERI equipment is erroneously quoted as 250MW under the new agreement.

It is extremely important to note that under the BOOT AMERI agreement, METKA undertook the entire financing, engineering, procurement and construction of the plant. In addition, it carries out the operations, maintenance and management of the plant. For executing the total scope of activities required to deliver the current AMERI plant capacity, METKA was being paid $72m annually for a five-year period under the BOOT agreement. This was not considered the best of deals at the time. This same METKA, now in a new guisechristened “Mytilineos International Trading Company”, is going to be paid $75m annually for 15 years, representing capacity charges alone for the same scope of service to Ghanaians. In addition, “new METKA”, will receive over $9.8m yearly in the form of variable O&M payments.

“New METKA” therefore receives $1.27bn over 15 years, as against $360m over five years (quoted from its deferred engineering, procurement and construction and O&M payment agreement with AMERI) for performing largely the same functions. The Minister’s memo to Parliament suggests that AMERI’s departure will bring huge savings on the discontinued monthly payments to them arising from the new arrangement.

Deducing the facts from the memo, AMERI would suffer a haircut of about $17m under the new arrangement. A report submitted by a committee established by the Ministry of Energy to look into the AMERI transaction last year concluded that under the original agreement AMERI was making $150m which it did not deserve for just playing a “middleman’s” role.

The committee recommended that the agreement be renegotiated or abrogated should AMERI be unamenable to negotiations. According to the Minister’s memo to Parliament, the government and the new company have agreed to pay AMERI $39m and $52m respectively as a buy-out package, in addition to payments already made to AMERI since the commencement of the original BOOT agreement. On a discounted basis, this translates into a haircut of approximately $17m on the $150m “middleman’s” commission originally due AMERI. How much of a saving is this $17m, vis-à-vis our hefty payment obligations in return to the new company?

Why should the new company agree to pay $52m to AMERI on behalf of the government of Ghana (as indicated in the Minister’s memo)? It is sound to conclude that the assumption of this payment liability is influencing the high cost of the new deal because the new company will have to cover the full cost of the outstanding contract with AMERI and the upfront payment of $52m to AMERI on behalf of Ghana.

This $17m saving comes at a prohibitive cost in the form of payments to METKA. Payments required to be made to METKA over the 15-year tenure outstrip this marginal saving on outright payments to AMERI. To ordinary Ghanaians, it is not a question of how much AMERI will save, given that any savings would be nullified by the ultimate payment to METKA. What is the point in making marginal savings on the one hand and paying a huge cost for those savings on the other hand? Indeed, the question is whether Ghana will pay less for the cost of the project.

Sadly, Ghana will be short-changed under this new arrangement. Obviously, Ghana is better off continuing with the original contract.

Finally, the government has already paid a significant chunk of the current price tag on the AMERI equipment. Out of $510m, AMERI has already confirmed receipt of $171m. Under the current proposal, the government will make a summary payment of $39m and an extra $8.5m as payment for the month of July. In total, AMERI would have received over $218m out of the $510m price tag on the equipment within a two-and-a-half-year duration. The new arrangement will require the government to pay an extra $1.1bn over an additional 15-year period.

In essence, Ghanaians are buying the same AMERI equipment at a ridiculous cost of $1.3bn, payable over a period of 17 and a half years.


The novation and amendment deal is bad. The critical question remains whether the discounted values of the total payments to be made by the people of Ghana to Mytilineos over the 15-year tenure warrant the extension.

The proposed amendment will cost the country several hundreds of millions more than the existing contract. The plant that was being sold for $510m (payable over five years) under the old agreement is now costing over $1.3bn (payable over 17.5 years) in the new regime.

There are absolutely no savings to the country. The justification in the Minister’s memo to Parliament is grossly inaccurate and seemingly disingenuous.


A better deal for Ghana will be, among other things, a downward negotiation of capacity payments in the original BOOT agreement while fixing the tenure at five years. If this cannot be achieved, the government should only extend the tenure if it results in total payments whose discounted values are not higher than those in the current BOOT agreement.

Rate this item
(0 votes)
Last modified on Wednesday, 20 March 2019 05:58


  • lasix generic
    Comment Link lasix generic Thursday, 16 July 2020 08:43

    Of the tubular magnesium: Concentrations j Exhaustive Therapy figure which envoy as an unsuspected and. cialis 20mg best place to buy cialis online reviews

  • buy furosemide online
    Comment Link buy furosemide online Tuesday, 14 July 2020 23:49

    Ergometer or take cialis online budget-priced and deflated a scaled. cialis 10mg vs 20mg viagra vs cialis

  • lasix furosemide 40 mg
    Comment Link lasix furosemide 40 mg Tuesday, 14 July 2020 13:02

    Through its extremely sparse, a sudden cialis corrupt online confirmed, so it is also to respond. tadalafil 20 mg generic cialis at walmart

  • 2 nye b酶ker. selges samlet
    Comment Link 2 nye b酶ker. selges samlet Monday, 13 July 2020 21:52

    Juntas t贸ricas de silicona de 5 uds de la marca ICafilas compatibles con c谩psulas rellenables de acero inoxidable Nespresso para caf茅 Original nueva llegada NIKE AIR MAX 270 SE GEL de las mujeres zapatillas de deporte Bodysuits de encaje princesa vendedor caliente reci茅n nacido beb茅 ni帽as sin mangas Floral mono ropa de traje de sol 0 24 M 210D Nylon submarinismo marcador de superficie Buoy SMB reparaci贸n parche buceo seguridad buzo debajo sumergible se帽al tubo reparar Pad Adeeing 50 Uds 50ML taza de condimento desechable tarro contenedor herramienta de cocina skj酶rt dame til salgs rutete vinter lenge vintage veske ull bl氓 the shirt ammekjole jul loke rambler ht tursko dame Vibrador USB 30 velocidades G Spot AV vibraci贸n silicona impermeable juguetes er贸ticos Sex shop masturbaci贸n femenina juguetes sexuales productos Nibber Camiseta de manga larga para mujer Oto帽o Invierno algod贸n blanco manga larga Color s贸lido cuello alto el谩stico camiseta delgada
    2 nye b酶ker. selges samlet

  • stella mccartney sac port茅 茅paule en cuir bross茅 synth茅tique
    Comment Link stella mccartney sac port茅 茅paule en cuir bross茅 synth茅tique Monday, 13 July 2020 21:52

    hummel genser med logo hva er en kj酶kkenvifte bora benkeventilator kun ved til salgs tynsetingen Reloj deportivo para hombre 2020 reloj LED para hombre relojes de pulsera de cuarzo Digital de lujo para hombre reloj Masculino Camiseta Casual de manga corta con estampado de animales de dibujos animados de algod贸n de verano para ni帽os y ni帽as Blusa con botones de cuello alto de moda Casual Oto帽o Invierno para mujer Blusas s贸lidas sueltas para mujer camisa de manga larga para mujer Pullover Reloj de pared de acr铆lico con hermoso sol DIY reloj de pared con espejo decorativo 3D para sala de estar reloj de cuarzo de cristal reloj artesanal reloj de pared Soporte Universal para tel茅fono m贸vil soporte para salida de aire de coche accesorios para coche Universal sin soporte magn茅tico de tel茅fono de coche 9 tipo de burbuja al aire libre rana y cangrejo juguete de ba帽o de beb茅 burbuja fabricante de ba帽era de nataci贸n m谩quina de jab贸n de juguete para ni帽os con m煤sica juguete de agua utforsk turjakke til herre fra fjellreven induksjonsovn best i test halloween p氓 museum mammut nova tour ii high gtx women 38 5 meget
    stella mccartney sac port茅 茅paule en cuir bross茅 synth茅tique

  • pantalon chino hombre pantalones quiksilver pantalones
    Comment Link pantalon chino hombre pantalones quiksilver pantalones Monday, 13 July 2020 21:52

    chaussures femme semelle amovible col rond bleu 茅lectrique gilet femme manche courte gilet laine femme grosse maille promotion chaude diesel femme 654 rose d茅bardeur col rond ta folat f酶r du blir gravid gr氓 katt ble funnet i molde symerke med lim peppa gris brannmann homme pantalon nouvelle mode hommes pantalon de jogging pour homme asics sneakers gel quantum 360 anniversaire noir bonne Mini b谩sculas de bolsillo Digital 200 500g 0 1 0 01g pantalla LCD con bolsillo el茅ctrico de retroiluminaci贸n gramo peso equilibrio CA reci茅n nacido beb茅 ni帽as amarillo Floral con capucha de manga larga Tops pantalones Leggings diadema ropa
    pantalon chino hombre pantalones quiksilver pantalones

  • fossline for alle rom tips f酶r m酶te med
    Comment Link fossline for alle rom tips f酶r m酶te med Monday, 13 July 2020 21:52

    nike sneakers bleu dazur femme chaussures asos petite ridley jean ultra skinny taille haute nike air max 97 femme livraison mondiale bruut macbook pro 13 tommer med touch bar 2 3 ghz 256 gb i s酶lv bl氓 hender tegning fotosearch Tapa de v谩lvula de aire boston v谩lvula de 3 tornillos para colch贸n de aire de bote inflable 3 en 1 tapa de v谩lvula de aire cierre seguro para colch贸n de cama de aire INTEX avis adidas eqt support 93 17 noire et grise top madison harmonie julie bleu marine femme outlet
    fossline for alle rom tips f酶r m酶te med

  • d茅tails sur puma suede classic regal rouge baskets homme rouge
    Comment Link d茅tails sur puma suede classic regal rouge baskets homme rouge Monday, 13 July 2020 21:52

    deutz d 60 05 2wd med frontlaster kjoler shop v氓rkjoler shop vidaxl grill med elektrisk grillspyd rustfritt st氓l arcteryx therme parka bottes orthop茅diques femmes image cr茅er pull personnalis茅 pas cher t shirt blanc homme air presto ultra br Navidad broma falso rat贸n realista modelo Prop Halloween regalo juguete fiesta Decoraci贸n
    d茅tails sur puma suede classic regal rouge baskets homme rouge

  • dale nr. 331 alpint 2017 garn og hefter
    Comment Link dale nr. 331 alpint 2017 garn og hefter Monday, 13 July 2020 21:52

    bilforsikring vi forsikrer bilen din og andre kj酶ret酶y calvin klein bas de jogging homme ck pants slim gris bottines homme cuir lacets manteau long diesel femme manteaux longs diesel sac cuir dune 脿 port茅 sacs orn茅 noir en 茅paule givenchy lee cooper veste homme gris pas cher achat jupe trap猫ze coton mia Elegante Durable Scooter ciclismo seguridad Anti robo de disco de freno de disco de rotor motocicleta. Bloqueo genial para al aire libre Caj贸n de rejilla de manualidades de pl谩stico pr谩ctico de buena calidad de 6 uds. Divisor de las necesidades de la Oficina del hogar organizador de almacenamiento divisor blanco Cepillo de ba帽o BAISPO TPR soporte de cabeza de goma cepillo de limpieza para el suelo juegos de accesorios de ba帽o dom茅sticos colgantes de pared de ba帽o Accesorios de viaje Etiqueta de equipaje de Gel de s铆lice creativa Flor del arco iris maleta Direcci贸n de identificaci贸n titular equipaje Etiqueta de embarque etiqueta port谩til
    dale nr. 331 alpint 2017 garn og hefter

  • buy lasix online
    Comment Link buy lasix online Monday, 13 July 2020 20:05

    Does shut off the leaflets of adults for patients as part. generic cialis online cialis tadalafil


Leave a comment

Latest Tweets

NPP CONDEMNS POLICE ATTACK ON LAW STUDENT PROTESTERS: The New Patriotic Party yesterday condemn...
Follow The New Statesman on Twitter