Power Minister issues statement to deny ‘misleading’ publication on AMERI deal

• Posted on December 14, 2015
• by Nana Kwesi Coomson
• Comment

The Ministry of Power has denied publications suggesting that the AMERI power deal was signed with a dubious company and at an inflated cost of $510 million.

Power Minister, Kwabena Donkor, has issued a statement Monday describing the publication by the Norwegian newspaper VG as “false, misleading and a gross misrepresentation of the facts”.

The publication, which has been widely circulated in Ghanaian media, among other things reports that one Umar Farooq Zahoor, a top official at AMERI is a wanted fraudster.

Farooq Zahoor according to VG is on the wanted list of Norwegian police and Interpol for his lead roles in various scams in Norway and other countries.

“The Government of Ghana has not entered into any agreement with Umar Farooq Zahoor. The Government of Ghana has an agreement with AMERI Energy.

“The Chairman of AMERI Energy is Sheikh Mohamed AL Maktoum who signed the agreement for his firm. Umar Farooq signed as a witness for him,” the Power Minister explains.

The publication also alleged that the $510 million power deal could have been gotten at lower cost — quoting about $220 million as the going price for the 10 power generators on wheels.

However, the Minister states: “the Government of Ghana has not made any payments to AMERI and will not be making any payments for the cost of the equipment.”

Read below the Minister’s statement on the report.

MINISTRY OF POWER STATEMENT ON FALSE PUBLICATIONS ABOUT AMERI ENERGY POWER PROJECT

The Ministry of Power has noted publications in sections of the media attributed to a Norwegian newspaper, VG. The thrust of these publications is that:

1. The Ministry of Power representing Government entered into an arrangement to secure a 250MW power plant with a company of dubious background.

2. That the transaction amount of $510 million is inflated compared to other options.

The Ministry wishes to state that these publications are false, misleading and a gross misrepresentation of the facts. For the avoidance of doubt, the Ministry of Power wishes to clarify the matter as follows:

ISSUE OF COST OF PLANT

The Ministry wishes to state that the agreement with AMERI is a Build, Own, Operate and Transfer (BOOT) agreement and not an outright purchase of generating plants.

The Government of Ghana has not made ANY PAYMENTS to AMERI and will not be making any payments for the cost of the equipment.

Per the agreement with AMERI, the Government of Ghana through the Volta River Authority (VRA) will only make payments to Ameri for power produced and supplied to the VRA just like any other Independent Power Producer (IPP).

Also, per the agreement, Government was required to provide a standby Letter of Credit (LC) for an amount of US$51 million, which LC has been raised. Ghana will however assume eventual ownership of the equipment after five (5) years of production and sale of the power to the VRA.

It must also be explained that the quoted price of $220 million in the Norwegian story for outright purchase of similar turbines is exclusive of all other costs such as auxiliaries, balance of plant, civil works, sub-station, installation of equipment, cost of financing, operation and maintenance etc.

– Under the agreement with AMERI Energy, the cost of all these auxiliary works is being borne by AMERI Energy.

– From the foregoing, it is false to claim that the Government of Ghana signed a $510 million agreement for the plant, when it should have been $220 million.

– On claims that the manufacturers of the plant, GE, could have been contacted to negotiate a direct purchase, the Ministry wishes to state that an earlier offer from GE Consortium to the VRA for similar equipment on rental basis proved to be far more expensive and was therefore rejected by the VRA.

ISSUE OF DUE DILIGENCE ON AMERI ENERGY POWER PLANT

– The Government of Ghana has not entered into any agreement with Umar Farooq Zahoor. The Government of Ghana has an agreement with AMERI Energy.

-The Chairman of AMERI Energy is Sheikh Mohamed AL Maktoum who signed the agreement for his firm. Umar Farooq signed as a witness for him.

– The Bank of Ghana before establishing the Standby LC conducted its own due diligence on AMERI Energy.

– The American firm, JP Morgan also independently conducted its own due diligence before confirming the Standby LC for the project.

– Government of Ghana represented by the Ministry of Power and the Attorney General’s Department also conducted due diligence on AMERI Energy and reviewed strenuously the project agreement before submitting to Parliament.

– Parliament, upon receipt of relevant documentation on the project and the agreement, also scrutinized and reviewed the agreement before approving it at the Committee Level unanimously and later by the House.

CONCLUSION

The Ministry of Power will continue to work assiduously to end the current power sector challenges. In doing so we expect all stakeholders to commit to the noble path of resolving this national challenge instead of throwing in misleading claims programmed to disrupt and derail its efforts.

We wish to reiterate that as part of efforts to resolve the current load shedding exercise, the following are underway:

– 225MW Karpower Barge is ramping up generation to attain the contracted generation capacity.

– The 250MW AMERI Plant is undergoing commissioning.

-The first unit of the 220MW Kpone Thermal Plant is also undergoing commissioning.

– The 12OMW TICO Steam Expansion has been completed.

– The first part of 120MW of the 360MW Sunon Asogli Plant is near completion.

Dr. Kwabena DONKOR

MINISTER FOR POWER

ACCRA

December 14, 2015