Government-Ezra deal sketchy and shrouded-Prof. Akech

The recent power halt in Juba City by Juba Electricity Distribution Company (JEDCO), resultant of unsettled millions of dollars government owes to the power provider, has sparked concerns over the details of the 2017 Power Purchase Agreement (PPA).

The Power Purchase Agreement (PPA), a deal between the government and Ezra Construction Development Group (ECDG), led to the establishment of the private owned power plant by ECDG and sell on the power to the government.

PPA normally entails terms and conditions, among others, sale of capacity and energy, charges for available capacity and electricity output, third party sales and underperformance and delays by the power producer.

The PPA terms and conditions oblige parties to mutually ensure there ia sustainable supply of power.

“Given what we now know, Ezra is practically a lucrative forex business that is selling electricity as means to an end. Hence, there is absolute need for a government’s probe into Ezra’s contract and operations in order to lay bare all the facts: and take measures that will safeguard public interest against Ezra’s monopolistic and exploitative behavior,” Prof. John Akech Vice Chancellor of University of Juba posted in his blog page on 10^th April. 

In the Ezra group’s recent press statement the City Review obtained a copy, the government did not live up to its obligations provided in the Power Purchased Agreement (PPA), to pay an amount totaling to over 85 per cent of the purchased power in U S dollars on time for over 15 months.

“The Juba Power Plant, is major electricity supplier for the country, was developed with capital expenditure provided by investors and finances loans in which a one-year grace period has allowed the company to delay re-payments. However, this period ended in January 2021, resulting in an urgency to receive JEDCO’s owed foreign currency,” the statement partly read.

According to the PPA deal, Ezra group sells power in bulk to JEDCO which resells it to clients in local currency, and government converts the amount into dollars at unknown low official rate which goes back to the power provider for importation of fuel, equipment and clearance of loans.

However, Prof. Akech who has some insight into the PPA said the deal makes Ezra “a forex business with electricity outfit providing conduit”.

“Intelligent people are bound to ask questions about the terms and conditions of the signed Power Purchase Agreement (PPA) that gave Ezra the monopoly of generating and supplying power to Juba City. Details are sketchy and shrouded in secrecy, but the information coming out into public domain leaves much to be desired.” 

“Ezra holds majority 52 per cent of shares in JEDCO, while the government represented by the Ministry of Elecricity and Dams, has 48 per cent stake. According to an implementation agreement signed with the Ministry of Electricity and Dams, JEDCO buys electricity from Ezra on whole sale at USD 0373 per kilowatt-hour (KWh) and sells it to the public at USD 0.420 per 1 kwh or its SSP equivalent.”

The Ezra Group runs a 100-megawatt power plant on a build, own, operate and transfer basis and provides 33 MW to the capital city and surrounding areas.