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How do partners formulate and work towards partnership goals? 7.3.1

As characteristic of most PPP projects, the goal of the partnership is a declaration by the Government of Ghana made through the National Energy Policy, which is to achieve 5000MW of electricity generation. Even though the goal of the partnership has been stated by

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the government, private actors at Sunon Asogli and CENIT Energy attest to it and work towards it regardless of the individual interests of their organisations. In working towards this goal, partners have adopted a multilevel form of communication (national and partnership level) and have also engaged in frequent interaction (both scheduled and unplanned meetings). At the national level, actors from IPPs have been integrated in decision making with government actors from the Ministry of Energy and the two Regulatory Agencies (PURC and Energy Commission). Grievances of primary partners especially the issue of non-payment by partners at ECG are also mostly resolved at the national level. This has impacted positively on the commitment and motivation of IPPs towards meeting the sector/partnership goals. However, actors from Sunon Asogli and CENIT Energy and their partners at ECG showed a formal relationship based on their Power Purchase Agreement and the study here argues this is because of the transactional nature of such contracts. This, even though comes in the way effective collaboration also ensures adherence to contractual obligation to meet partnership goals. Nonetheless, partners still organise joint capacity building programs to engage their management and staff on achieving better electricity service delivery. Thus, there is show of solidarity which indicates the perception of teamwork to attain partnership goal, which as explained, is a worthy success indicator that the partnership is making progress. Therefore, even though the target goal has not been met, this is a good indication that with sufficient trust and mutual relational power, the partnership would be stable and consequently realise their goal of expanding electricity generation.

How do partners build and maintain trust in working towards partnership 7.3.2

goals?

By virtue of their Power Purchase Agreement, partners from ECG, CENIT Energy and Sunon Asogli have expectations they anticipate to be met and also bear some risks they expect to be mitigated. Findings from the study show that, while partners at ECG are generally satisfied with the performance of their partners at Sunon Asogli and CENIT Energy, these IPPs have not had their expectations met, that is, of being adequately remunerated. Because these IPPs solely finance their operations without financial guarantees, non-payment by ECG remains their major risk and the study has revealed that ECG fails in mitigating this risk. The regulatory agencies who are supposed to also hold ECG accountable have expressed an inability to do so because of ECG’ monopoly in the electricity industry thus, Sunon Asogli and CENIT Energy are constantly exposed to commercial risks.

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The study in this vein found that because the two necessary elements of trust building (meeting of expectation and effective risks management) are generally absent, partners from the IPPs are wary of further resource expansion because of their low confidence in their ECG partners. Consequently, confronted by uncertainty of the additional cost they may incur in pressing regulatory agencies to sanction ECG, these IPPs have expressed the willingness to expand generation capacities only if partners at ECG commit to their payment obligations and prove financial credibility, and if government also fulfils its promise of providing guaranteed supply of natural gas for consistent power generation.

How efficiently do partners make their complementary resources available to 7.3.3

meet partnership goal?

While Sunon Asogli and CENIT Energy solely finance their operations to generate the contracted quantity of electricity, ECG being the current viable off-taker in Ghana provides the electricity market by virtue of owning the largest distribution network. There is thus interdependence to meet individual organisational and partnership objectives (profitability for IPPs with access to electricity market and ECG meets electricity demand with access to power generation from IPPs). However, the prevailing relationship between partners at ECG and their counterparts at Sunon Asogli and CENIT Energy demonstrates a dependence asymmetry as ECG uses its monopoly as a source of advantage to withhold more resources from these IPPs (in the events of persistent non-payments for services).

It was also found that even though the government through its ministry and regulatory agencies makes certain incentives available to these IPPs to ease their cost of operations, Sunon Asogli and CENIT Energy do not have financial guarantees from government. As ECG retains monopoly in electricity distribution, the unavailability of financial guarantee to Sunon Asogli and CENIT Energy places them at a disadvantage as they (IPPs) pose little or no threat to ECG in the events ECG defaults in payment. This situation is further aggravated because the regulatory agencies are handicapped in holding ECG accountable. Thus, the partnership is characterised by high alertness on guarding against opportunistic behaviour especially by Sunon Asogli and CENIT Energy, and what they do at best is to commit as required by contractual agreement and hope to be paid accordingly. IPP actors expressed that if there were other efficient companies willing to buy their services, they would partner them instead of ECG, therefore, the stability of the current partnership to meet the targeted 5000MW by government cannot be guaranteed.

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