Ghana’s Parliament has approved a tax exemption package of 90 million United States Dollars to Early Power Limited, a company contracted to construct Early Power Project.
The Early Power project, which is pegged at the cost of 647 million US dollars, is expected to produce a 400-megawatts power plant.
Addressing the media on the tax exemption in Parliament House last week Friday, deputy Minister of Finance, Mr Kweku Kwarteng, said government was considering other ways to ensure that “Ghana gets value for money.”
“Government is currently undertaking a review of the exemption policy to enable value for money in future contracts,” he reiterated.
“Please take note we were compelled to do this because we met an agreement that had already committed government to do this. We have also noted the concerns raised about the cost benefit of this exemption,” he said in defence government’s position.
Mr Kwarteng hinted that government was partnering with some international partners to review the impact of exemptions on the economy
“It is correct that many of us in the past have had reservations about some of the exemptions granted and its effects on the economy. It is for this reason, we, with the support from DFID, are taking steps to do a comprehensive study of the impact of exemptions on the economy,” the deputy finance minister indicated.
The agreement, according to him, is a 400MW combined cycle gas turbine power plant to be situated in Tema, Accra.
Early Power Limited entered into an agreement with the government of Ghana, together with the Electricity Company of Ghana (ECG), Sage Petroleum Limited, Endeavour and EPL Holdings Cooperate, UA, General Energy Investments (GE) IBV and Quantum Gas Terminals.
The project will involve the development, ownership, operation and management of the 400 MW Combined Cycle Plant to be fueled by either Liquefied Petroleum Gas (LPG) or Natural Gas (NG) for a 20-year period by Early Power Limited in Tema, strategically close to the Tema Oil Refinery (TOR).
Beyond the 20-year period, the power plant will transfer to a nominated entity by the government of Ghana at a purchase price of US$1.00.
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