Parliamentary investigation clears GNPC-Genser energy deal of $1.5bn loss allegations by ACEP, IMANI
The Parliamentary Select Committee on Mines and Energy has concluded its investigation into the Ghana National Petroleum Corporation (GNPC) and Genser Energy Ghana Limited (GEGL) deal, finding no evidence of losses as claimed by the African Centre for Energy Policy (ACEP) and the IMANI Center for Policy and Education.
The allegations by ACEP and IMANI, which arose in July 2022, asserted a loss of US$1.5 billion, a figure dismissed by the committee’s report that highlighted benefits for Ghana exceeding that sum.
In a report, the committee refuted the claims made by ACEP and IMANI, labeling their calculations and concerns as faulty.
The Committee criticized the computation methods employed by the two organizations, highlighting that the contractual sum of US$2.79/MMBtu included offsets from a capacity charge of US$3.29/MMBtu.
According to the Committee’s findings, the following are some benefits to be gained by the country in the GNPC-Genser deal;
- Make savings to the tune of US$1462billion as GNPC will lose US$1.462billion if GEGL moved to WACoG Net Back
- GNPC/GEGL Gas Transmission Agreement’s savings to GNPC is US$ 1.462 billion. If Ghana had borrowed, it would have cost US$ 1.625 billion.
- Reduction in transmission losses by US$480millions once Ameri plant is relocated to Kumasi and made operational
- Export of NGLs using Takoradi Port would increase port revenue from cargo fees, port dues and other services.
- 15m tonnes of carbon dioxide reduction per year as the UP01 and PP03 will reduce flaring and bring all flared gas to onshore for processing and utilisation as well as 0.225m tonnes of power generation in Kumasi, saving about 40MW of transmission loss.
- 75 percent fuel cost reduction by substituting CNG for diesel for industry by 75 percent
- GEGL clients have extended the life of their mines by 10 years since engaging GEGL due to reliable and quality power
- Structuring of GEGL pipeline network around future industries would enable these industries to develop quickly.
- Over US$400m export revenue from NGL/LNG processing and export per year
- Over US$980m direct investment in Ghana with same amount of forex invested
- About 250 direct and 950 indirect jobs to be created from the business of GEGL
Meanwhile, Ranking Member of the Mines and Energy Committee, John Abdulai Jinapor, has expressed disagreement with the committee’s findings.
Despite the investigation’s conclusions and the committee’s enumeration of 11 key economic advantages linked to the deal, Mr Jinapor maintains concerns that the Gas Sales Agreement will lead to substantial state losses.
However, he has yet to provide alternative calculations to substantiate his standpoint.
