WB is twisting the facts on IPPs PPAs guarantees – Mould
Adnan Adams Mohammed
Alex Mould has challenged the rejoinder of the World Bank
which sought to twist a portion of a news article by Accra based radio after
granting an interview to the station.
Mr Mould corrected the misleading aspect of the rejoinder
which sought to suggest that, Mr Mould had said in the interview that, World
Bank provided a direct guarantee to Independent Power Producers (IPPs) in
setting their Power Purchase Agreements (PPAs). He said the IPPs he referred to was not those
emergency power barges (‘Dumsor’ power barges) that were signed between the
periods of 2014 to 2016, the four IPPs which are yet to start producing power including
the Amandi, Early, Ghana Power Generation Company (GPGC) and one other which
the WB was directly involved in their selection.
The interview of Mr Mould was premised on the accusations of
the current government against the former Mahama-led administration for signing
unproductive PPAs under 'Take-or-Pay' agreements which they claim causing financial loss to the state as the country is paying for unused power. But, the World
Bank seemed not happy for it to be linked to the IPPs PPAs and thereby issued a
press statement to clear itself which also got Mr Mould to counteract to the
statement.
“I never said the WB gave guarantees to the IPPs”, Alex
Mould, former CEO of GNPC corrected. “I said they supported Ghana government by
giving guarantees, that is, backing the GCSA that Government of Ghana had to
give to the IPPs.”
In the said news publication being referred to by the WB, Mr
was quoted to have said, “What people don’t know is that the World Bank
supported the government of Ghana to support four IPPs to be built mainly
because they needed guarantees for the off-takers of the ENI-Sankofa-Gye Nyame
gas”, Alex K. Mould in an interview last week.
"World Bank had given Ghana US$750 million in terms of
guarantees to guarantee the ENI-led Sankofa-Gye Nyame gas project, one of the
conditions were that we would either build a pipeline or do the convertibility
so that the gas can go from the west to the east and we would have off-takers –
IPPs that are ready to take the gas”.
“And, as such, they supported Ghana to give what we call a
Government Support and Consent Agreement to these IPPs for them to be able to
take to their financial institutions to say that: ‘We have a guarantee from the
Ghana government which is backed by the World Bank; and, as such, they were
able to get the financial decision to build these plants”, he explained.
“That is what we have to understand; that there was a reason
for these plants to be built”, he argued, noting: “It wasn’t like these guys
came willy-nilly, they had a PPA, they went to their banks, they got financial
[support] and now we are saddled with that. No”.
From the direct quotations, it is clear Mr Mould did not in
any way indicated otherwise as the WB press release tried to twist the facts
the former GNPC said in the interview.
The WB in its release said; “Following recent media reports,
the World Bank wishes to clarify that it has not provided any financing or
guarantees to the Independent Power Producers (IPPs) that signed Power Purchase
Agreements with the Government of Ghana or the Electricity Company of Ghana
during the (Dumsor) energy crisis in 2014-2016.”
“To secure Ghana’s energy future, the World Bank supports
the Energy Sector Recovery Plan (ESRP) of the Government of Ghana for
affordable and reliable electricity supply and enhance the accountability in
the energy sector.”
Consequently, the WB did agree to the facts Mr Mould
said during the interview on how the WB’s financing and guarantee supported
Ghana in the Sankofa Gas Project translated into helping Ghana to be able to
partial risk guarantee to IPPs which, the WB was practically involved in their
selection since they were going to be off-takers of the Sankofa gas.
The WB statement
stated; “The World Bank Group provided financing and a guarantee to the Sankofa
Gas Project, which since 2019 has increased the availability of natural gas for
power generation by leveraging private capital investment and promoting a
cleaner energy mix.
“The World Bank is committed to supporting Ghana in its efforts
to sustain economic growth, accelerate poverty reduction, and enhance shared
prosperity in a sustainable manner.”
Mr Mould in his comment reacting to the WB release posited:
“Yes, the WB supported Ghana with a “CREDIT Program” - involving loans Grants
and credits - and part of that program was used by GoG to support the Partial
Risk Guarantees (PRGs) given to IPPs that acts as a credit derivative and
lessens the risk of default by the counterparties.
“So, they provided support in the form of credits which was
given to GoG as part of the WB Program to Ghana so that GoG could provide a
credit-backed PRG to enable these IPPs to raise the financing.
“The WB was not only aware but also involved in the
discussion of the selection criteria to be used (since we had more than 8 IPPs
that qualified) for the PRG to be given to these IPPs.
“The WB lent support to Ghana government via their program
as the PRG without a credit enhancement from a multilateral development
institution, such as the WB, was not acceptable to the lenders to the IPPs.”
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