The Dubai Connection: AMERI Energy and the 510-Million Dollar Deal (Part 1)

I was woken from my Facebook sabbatical over the weekend when Verdens Gang (VG), a Norwegian newspaper based in Oslo, broke a story on the murky power contract between the Government of Ghana (GoG), represented by the Ministry of Power (MOP) and the Africa & Middle East Resources Investment Group (Ameri Energy) LLC dated 10 February 2015.

What continues to boggle my little mind is why the government did not directly sign a contract with APR Energy (a much more credible company) or with GE Leasing to procure the short-term turnkey power solution. Reason? Too many middlemen all wanting a piece of the pie (and actually got a major chunk of it though I suspect the companies aren’t the ultimate beneficiaries). They only serve as conduits to serve the kleptocratic intents of some politicos.

The government is one big fat liar! They claim (as per Ministry of Power’s press statement and subsequent interviews) that the US$510m includes other costs such as fuel, auxiliaries, balance of plant, civil works, sub-station, installation of equipment, maintenance, etc., BUT I can state as per copies of the agreement sighted that: (1) the contract price does not include any costs with respect to fuel (fuel will be provided by the government), (2) contract price does not include any costs with respect to demineralized water (to be provided by the government in accordance with the Operating Specifications); (3) government is responsible for scheduled overhauls, provision of security, housing, supervision and management, procure and maintain required approvals,etc; and (4) the contract price exempts AMERI from paying any taxes at all.

The government claims that it has not made any payments (fair enough); but under the contract, they are obligated to make payments to AMERl ENERGY on a MONTHLY BASIS as required under various computations in the Agreement immediately the plant starts commercial operations. This includes the equipment costs and other variable charges. So either way, we’re locked into this arrangement which greatly favours AMERI whereas the Government of Ghana bears a disproportionate share of the risks. I am left scratching my head if this is really a Build, Own, Operate and Transfer (BOOT) Agreement as I know in project financing. Anybody keen to know more especially the commercial terms should go find the agreement and read Annex – G (“Contract Price”). Don’t be fooled by your government!

Ameri has basically sub-contracted the deal out to METKA, thereby doing practically nothing in the process, but it stands to make hefty profit margins based on these inflated contract sums. According to the Norwegian tabloid story, METKA, the Greek corporation is the one that provided Ghana with the ten brand new gas turbines manufactured by General Electric (GE). In addition to that, the Greeks will be responsible for operation and maintenance of the turbines. So where does AMERI feature in all of this? Hmm!

All civil society groups and citizens need to pile public pressure to get the government to revise this contract! The toils of our cocoa farmers, teachers and workers, which provided scholarships for many of these people in government, must not be left to waste. Ghana must work for ALL citizens!

You can follow the discussions at https://www.facebook.com/theo.acheampong/posts/10208393283979024

Photo Credit: Verdens Gang (VG)

About the Author

Theo Acheampong
Theo is an economist and social media enthusiast who provides regular commentary on socioeconomic and political developments in Ghana and Africa at large. Theo is passionate about leadership, entrepreneurship and the role of innovative technologies in solving Africa's developmental challenges.