An independent power producer, Ghana Power Generation Company (GPGC) Limited has been awarded US$170 million judgement debt by the United Nations Commission on International Trade Law (UNCITRAL) Tribunal against the Government of Ghana for the wrongful termination of an Energy Power Agreement in 2018.
Here are some highlights and timelines leading to the award of the judgement debt
- $170 million has been awarded Ghana Power Generation Company Limited (GPGC) in judgement debt the for wrongfully termination of their contract under an an Emergency Power Agreement by the Government of Ghana.
- This agreement was entered into in 2015 in the height of the power crises to generate power up to 107 megawatts (“MW”) of power for four years. The contract was signed on June 3, 2015, approved by Parliament on July 23, 2015 and the power plants shipped in in November 2016. The contract sum was US$99.6 million (US$ 24.9 million per annum for four years).
- Government changed in 2017 and committee was subsequently setup under the chairmanship of then Executive Secretary of the Energy Commission, Dr. Alfred Kwabena Ofosu-Ahenkora to review all power purchase agreements including that of the GPGC.
- In November 2017, the Minister of Energy then, Boakye Agyarko, presented before Parliament the recommendations of the committee. Key amongst the recommendations was the termination of 11 PPAs, including the GPGC agreement. According to him, government could save more from the termination than executing the contract.
- The Government of Ghana, through the Ministry of Energy terminated the agreement on February 18, 2018, alleging that the company failed to fulfil its obligations. The action was on the recommendation of the Attorney-General then, having been instructed by cabinet.
- GPGC fought back arguing the government delayed a number of its obligations that would have made it easy for the them to also full their obligations – they cited tax waivers and permits government had promised to facilitate them get but defaulted.
- GPGC accepted the termination of the agreement on August 13, 2018 and headed to the United Nations Commission on International Trade Law (UNCITRAL) Tribunal to demand that the government compensate it for breaching the contract.
- The tribunal awarded the $170 million against Ghana. In law, a party to an ADR can challenge an arbitration award in court and that is the route Ghana took by going to a UK court. Unfortunately, Ghana could not meet the timelines set by the court. Ghana had 28 days after the tribunal ruling to file processes at court, but went to court on the 25 day for an extension by another 28 days. They missed the new timeline citing the appointment of the AG and Covid-19 as reasons, but the court decided on the matter on June 8 and held that the excuses are “intrinsically weak”.
Meanwhile the Attorney-General, Godfred Dame has hinted that the government intends to lodge a complaints at the Criminal Investigations Department of the Ghana Police Service to investigate the circumstances that led to the signing of the power purchase agreements.
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