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GPGC judgment debt: I’m completely heartbroken, says Armah-Kofi Buah

Emmanuel Armah-Kofi Buah, former energy and petroleum minister

Emmanuel Armah-Kofi Buah, former energy and petroleum minister

The former energy minister Emmanuel Armah-Kofi Buah has called for calm as the government prepares to investigate circumstances leading to the award of a judgment debt against the Government of Ghana in relation to a power purchase agreement with Ghana Power Generation Company (GPGC).

His comments follow the rejection by the commercial court in London of a late appeal from Ghana against a judgment debt award of US$134 million in favour of the power contractor, GPGC.

The former energy minister said he is distressed to see how the NDC government’s attempts to resolve the power crisis during its tenure have ended in a judgment debt.

“As a former deputy energy minister and former energy and petroleum minister, I am completely heartbroken that all our hard work and singular focus to address our power challenges and ensure a stable electricity supply is being marred by a decision for a US$170 million judgement debt, which was imposed by a London commercial tribunal on behalf of Ghana Power Generation Company (GPGC) for wrongful termination of the contract,” he posted on Facebook.

Armah-Kofi Buah added, “How did this come about? The GPGC emergency power agreement was signed in July 2015, it had cabinet and parliamentary approval. The termination of the agreement leading to the tribunal award took place in 2018 under the current government. This was after Ghana’s failure to properly defend the case in court.”

“Tread cautiously”

The Ellembelle MP however wants the Attorney General and Minister of Justice to tread cautiously in resolving the matter to help Ghana learn lessons from the judgment.

“I have heard the Attorney General’s hasty threats of investigation and prosecution,” Buah said.

“It is important to fairly study the events leading to the termination and how as a country we defended this case in court.

“This will allow us as a country to lay the responsibility where it belongs and learn clear lessons from this.”

Background 

In January this year the International Court of Arbitration awarded costs of US$134 million and administrative costs of $30 million against the Government of Ghana in relation to its cancellation of an emergency power purchase agreement with GPGC Ltd.

The contract was cancelled in 2018 during the tenure of the then energy minister, Boakye Agyarko. It was one of several deals scrapped by the new NPP government on the grounds that the country did not need a raft of power purchase agreements.

The ruling by the International Court of Arbitration ordered the Government to Ghana to pay to “GPGC the full value of the early termination payment, together with mobilisation, demobilisation and preservation and maintenance costs in the amount of US$134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus 6%”.

The Government of Ghana was also ordered to pay GPGC, in total, “US$ 309,877.74 in respect of the costs of the arbitration, together with US$3,000,000 in respect of GPGC’s legal representation and the fees and expenses of its expert witness, together with interest on the aggregate amount of US$3,309,877.74 at the rate of LIBOR for three-month US dollar deposits, compounded quarterly”.

Fred Dzakpata

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