Warning! Ghana Stands To Lose US$100m Stashed In Escrow Account

The Africa Centre for Energy Policy, ACEP, is worried Ghana could lose an amount of 100 million dollars which has been stashed in an escrow account by the GNPC as guarantee to facilitate the provision of emergency power by Turkish company, KAR-POWER. This according to ACEP is because the ECG, which the GNPC is standing surety for, has a track record of defaulting in payments. Executive Director of ACEP Mohammed Amin Adam tells Joy Business the GNPC should not have engaged in that investment because it is not their core business and that it is the business of the Electricity Company of Ghana. “It is the ECG that has to find money to put into an escrow to guarantee that they will pay for the power that Kar-Power will be bringing. If they cannot do that I don’t see why GNPC should be doing that” he stated. The investment according to him has negative implications for the country since the money is now lying idle in an account waiting for the ECG to default before the money would be taken. “The GNPC argues it is going to derive some benefits because it is going to sell gas to Kar-Power but that should have even required Kar-Power to also have an escrow so that if they default in paying for the gas that would be sold to them, then GNPC would fall on that. “The GNPC is not a power producer or distributor so how come it has an amount of 100 million dollars lying idle in an escrow account to pay for power” he stressed. The most worrying aspect of the investment according to Dr. Amin Adam, is that ECG does not have a good record as far as paying for the power consumed is concerned which means that the risk of default is very high. “If that happens, who would pay that money back to the GNPC and how would GNPC account for that money in their core activities?” he asked. He is as well demanding the publication of the reserve accounts of the GNPC to enable stakeholders track the use of revenues that would be derived. The GNPC published its audited accounts for the year 2013 but for Mr. Amin Aadm, “that is more like a financial audit which did not include the reserve audit. We are interested in knowing how much reserve we have, what is the GNPC’s share if the reserves and we want them to provide for us a reserve audit. If they do not have, we would want them to conduct one.” This he said will enable Ghanaians know the benefits and what to expect in respect of production volumes and revenues that could be gotten from Ghana’s total share of the reserves giving certain projected prices of crude oil.

Source: Joy Business