Ghana: Gov’t To Abolish Take Or Pay Policy In The Energy Sector In August

Ghana’s Minister for Finance Ken Ofori-Atta has hinted that government will from August this year do away with take or pay policy in the energy sector which is crippling the sector financially.

The Minister who described the country’s energy sector as being in a state of emergency due to the take or pay policy said the current administration cannot continue with the policy.

The previous administration headed by President Mahama signed take or pay contracts with some independent power producers.

The Akufo-Addo administration has been criticising the previous administration with least opportunity over the take or pay contracts.

Presenting a mid year budget statement in Parliament Monday, July 29, 2019 Mr Ken Ofori-Atta noted that the country is paying so much for unused power.

He said currently, our installed capacity of 5,083 MW is almost double our peak demand of around 2,700 MW .

He stressed that 2,300 MW of the installed capacity has been contracted on a take-or-pay basis.

This means that we are contractually obliged to throw away money for this excess
capacity which we do not consume.

According to him, this has resulted in us paying over half a billion U.S. dollars or over GHS 2.5 billion annually for power generation capacity that we do not need.

Recommended for you